Explain why fiscal policy alone cannot increase nominal gdp, Macroeconomics

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Explain why fiscal policy alone cannot increase nominal gdp

Problem

1. (Equation of Exchange) Using the equation of exchange, show why fiscal policy alone cannot increase nominal GDP if the velocity of money is constant.

2. (Velocity)Why do some economists believe that higher expected inflation will lead to a rise in velocity?

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Macroeconomics: Explain why fiscal policy alone cannot increase nominal gdp

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