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Inflation — Work It Out: Question 2 Consider an economy with the money demand function is (mp)d=12×yi Round answers to two places after the decimal when necessary. d. Suppose the announcement of a new head of the central bank, with a reputation as a tough inflation fighter, reduces expected inflation by 1.0 percentage points. According to the Fisher effect, what is the new nominal interest rate? New nominal interest rate: % e. Calculate the new velocity of money. New velocity of money:
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Inflation — Work It Out: Question 2 Consider an economy with the money demand function is (mp)d=12×y...
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