Suppose Turkey s inflation rate was 55%, and its real GDP growth rate was 7.3%. The country s…

/in /by

Suppose Turkey s inflation rate was 55%, and its real GDP growth rate was 7.3%. The country s exchange rate fell by 54% against the U.S. dollar, its velocity of money was unchanged, and government spending rose by 45%. Use the QTM (i.e., monetarist theory) to explain whether Turkey s inflation was due to fiscal policy, monetary policy, or the exchange rate.