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Macroeconomics

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Macroeconomics. Use this equation and the quantity theory of money and fisher equation. Md Y = P 5i The following variables are: Y or GDP= 1,000 Money supply= 5,000 Growth rate of nominal money is 1% The real interest rate r is fixed at 3 percent by th investment and saving functions. Expected inflation rate is determined by the rate of nomeinal money growth i. Whats the nominal interest rate and the velocity for this economy? ii. Whats the price level