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Suppose that velocity and output are constant and that the quantity theory and the Fisher effect both hold. What happens to inflation, real interest rates, and nominal interest rates when the money supply growth rate increases from 5 percent to 10 percent?
Fiat Money
Money without intrinsic value that is used as money by government decree
Money
The set of assets in an economy that people regularly use to buy goods and services from other people.
Wealth
The accumulation of valuable economic resources and assets, including property, investments, and cash, that an individual or entity possesses.
Roundabout Trade
Trade involving multiple countries where goods are exported to one country before being re-exported to the final destination.
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