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Suppose that the Cambridge k equals 0.10, the supply of money is M = $1 trillions, and the real GDP = 100 billion units. What is the general price level (the GDP deflator)?

Assume that money supply increases by 10%, the real GDP increases by 4%, and the Cambridge k remains constant at k = 0.10 (as in the classical model). What will be the new GDP deflator.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M972133

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