It is the year 2025. The BMA sees that the economy is growin…

Questions

It is the yeаr 2025. The BMA sees thаt the ecоnоmy is grоwing аt 3% and the velocity of circulation of money is stable. (a) If the desired inflation rate is 2%, by how much should the money supply grow? (2 marks)(b) Calculate the internal rate of return on the following opportunity. You are the head of a pension fund. If you invest $75 million in a company, in 25 years, you will receive $375 million. (2 marks)(c) When you buy $10 million worth of shares in Google, what sort of investment does this represent? (2 marks)(d) By how much will this change net capital outflow? (2 marks)