Macro Module 14 expected inflation rate practice exam questions
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Question 14.1: Expected inflation rate
An economy has the following values.
● Population growth rate (n) = 0.55%
● ∂y/y = growth rate of real income per worker = 1.37%
● Growth rate of money supply (μ) = 4.74%
What is the expected inflation rate π?
Answer 14.1: 4.74% – (1.37% + 0.55%) = 2.82%
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