Suppose that in 2009 the money supply was $100 billion and real GDP was $300 billion. In 2010, money supply increased by 10 percent and real GDP increased by 5 percent. Nominal GDP in 2010 was $660 billion.
i) What was the price level in 2010? What was the velocity of money in 2010?
ii) Suppose that velocity was constant. What was the price level in 2009? What was the inflation rate in 2010?