Let the real high-powered money (H / P), equal $4,585 billion, and the real government bond (B / P) equal $3,150 billion.
If the rate of inflation is 5.5%, what is the amount of seigniorage (inflation tax)?
What is the real interest rate if the nominal interest rate is 8.5%?
Calculate the amount of real interest on government bonds.
What should be the maximum amount of government budget deficit to keep the real value of bonds and real high-powered money fixed?
If real government spending is $1500 billion, how much real taxes (net of transfer payment) must government collect to keep the real value of bonds and real high-powered money fixed?