Unformatted text preview: circumstances, the product of two growth rates, such as g m g v is approximately zero . For example, assume that g m ൌ .05 and g v ൌ .02 , then g m g v ൌ ሺ. 05ሻሺ. 02ሻ ൌ .001 , which is very close to zero, so we will assume that it is exactly zero. b. Imposing the assumptions of the quantity theory onto the equation, demonstrate Milton Friedman’s dictum that “Inflation is always and everywhere a monetary phenomenon.” The following problems refer to the “Problems and Applications” section at the end of Chapter 17 of Mankiw (pp. 382 ‐ 383). 2. No. 1 3. No. 2 4. No. 6 5. No. 7 6. No. 10...
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 Spring '10
 Sadler
 1918, Quantity Equation, 3 percent, Milton Friedman, 304L

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