Question

1-Suppose the central bank in the nation of Zook attempts to pay off its national debt...

1-Suppose the central bank in the nation of Zook attempts to pay off its national debt by printing large amounts of currency. The large increase in the money supply causes the price level to rise by 500 percent. What do you expect will happen to the value of Zook's currency?

Instructions: Round your answer to 2 decimal places.

The value of Zook's currency will ?? decrease/increse ?? by what percent
?? percent

2-

a. Assume that the value of a country's currency is 1 when the price level is 1.

If the price level changes to 1.2, the value of the country's currency will change by what
?? percent.

b. Now assume that the value of a country's currency is equal to 1 when the price level is 1.4.

If the price level changes to 1.5, the value of the country's currency will change by what
?? percent.

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