For an aggregate demand curve with $\vec { M }$ = 10% and $\vec { v }$ = 0%,if inflation is 6%,then real growth is:
A) -6%.
B) -4%.
C) 4%.
D) 16%.

Question

Quizplus · Accepted Answer

The aggregate demand curve can be represented by the equation %ΔM + %Δv = %ΔP + %ΔY, where %ΔM is the change in money supply, %Δv is the change in velocity of money, %ΔP is the inflation rate, and %ΔY is the real growth rate. Given %ΔM = 10%, %Δv = 0%, and %ΔP = 6%, we can solve for %ΔY: 10% + 0% = 6% + %ΔY, which simplifies to %ΔY = 4%.

For an Aggregate Demand Curve With M⃗\vec { M }M = 10% And

For an Aggregate Demand Curve With $\vec { M }$ = 10% And