Verified answer

Quantity theory of money: M * V = P * y, or expressed in natural logarithms:

d log M / dt + d log V / dt = d log P / dt + d log y / dt

where: d log V / dt = 0, because V = constant.

d log P / dt = 5% - 2% = 3% as the inflation rate per year.

of course it does. If the Fed or the Treasury in simple terms needs to boost GDP, all they'd desire to do is to commerce dollar costs, that are made from not something, for US government bonds, that are created out of not something. the difficulty is this would not make all of us richer- in actuality it makes all and sundry poorer. Even the inventory industry is in simple terms a cost, that's measured in money. so with the aid of fact the fee of the dollar falls, the dow rises. To coach that we've not got genuine boost, all you will desire to do is seem at this actuality: In 2010, the inventory industry went up by making use of approximately 15% in terms human beings money. yet once you have been to degree in yet another distant places money, say the Australian dollar, the inventory industry actual went down by making use of 7%. This scheme that our government is working is approximately to run out, and that i'd say that interior of a 365 days or 2, possibly much less, we are going to have a dollar disaster on our palms. some economists estimate that the disaster will start up by making use of the tip of this summer season. final, i like the way you're speaking suitable to the buyer cost index, with the aid of fact it quite is a very deceptive type that our authoritarian government has the audacity to replace for inflation. whilst inflation hits, commodities are the 1st to upward thrust, that are specially made from food and means.