If M = $100, Y = $500 and P = $2, then V is equal to

Some nations such as Ecuador chose dollarization because:

a. the currency was depreciating so rapidly it became nearly worthless. b. Ecuadorians wanted to save dollars for eventual emigration to the U.S. c. the Ecuadorian currency was backed by gold,which was confiscated by government officials. d. All of these are reasons why such countries chose dollarization.

If the real interest rate is 3 percent and the inflation rate is 2 percent, what is the nominal interest rate?

What will be an ideal response?