# 3 - Print name Recitation TA Hour Sign name Econ 520 F10...

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Sign name _____________________ Recitation TA & Hour_______________________ Econ 520 F10 Homework 3 (3.2 corrected late 10/14 in bold) 10/12, 10/14, due 10/15 For full credit, show your calculations on each problem. 3.1 (10 homework points) If real money balances are \$2000 billion (Year 2010 dollars), and the nominal money stock is expanding at an annual rate of 20%/year, what is the annual rate of seigniorage (in 2010 dollars)? Assume for simplicity that the government directly creates the entire money stock and pays no interest on it: 3.2 (10 homework points) If real money balances are \$2000 billion ( 2010 dollars), what annual rate of expansion of the nominal money stock is required to meet a seigniorage target of \$600 billion (2010 dollars) per year? Assume for simplicity that the government directly creates the entire money stock and pays no interest on it: 3.3 (10 homework points) If real money balances are \$2000 billion (2010 dollars), and inflation is 30%/year, what is the annual inflation tax on money balances (in 2010 dollars)? 3.4 (10 HW points)

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3 - Print name Recitation TA Hour Sign name Econ 520 F10...

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