Calculate what happens to nominal GDP If velocity remains constant at 5 and the money supply...
Calculate what happens to nominal GDP if velocity remains constant at 4 and the money supply increases from $350 billion to $525 billion. Originally, nominal GDP is $___trillion. (Round your response to two decimal places.)
Suppose that this year's money supply is $500 billion, nominal GDP is $10 trillion and real GDP is $5 trillion. a. What is the price level? b. What is the velocity of money? (Please calculate your answers in billions, i.e. leave off the zeros (0) if necessary.) c. Suppose that velocity is constant and the economy's output of goods and services rises by five percent each year. What will happen to nominal GDP and the price level next year if the Fed...
Using the quantity Theory of Money formula, suppose that in 2020: Money supply = $50 Billion; Nominal GDP = $1.0 Trillion; and Real GDP = $500 Billion. a). Calculate the Price Level (P) (2 marks) and Velocity of Circulation (V) (2 marks). Show your calculations for a full mark. b) Suppose the velocity of circulation is constant (the one you calculated in (a), and the economy’s output of goods and services increases by 5% annually. Calculate Nominal GDP (or what will happen...
Suppose that this years money supply is $500 billion, nominal GDP is $6 trillion, and real GDP is $2 trillion. a. What is the price level? What is the velocity of money? b. Suppose that velocity is constant and the economy's output of goods and services rises by 3% each year. What will happen to nominal GDP and the price level next year if the Fed keeps the money supply constant? c. What money supply should the Fed set next...
Using the quantity Theory of Money formula, suppose that in 2020: Money supply = $50 Billion; Nominal GDP = $1.0 Trillion; and Real GDP = $500 Billion. a). Calculate the Price Level (P) and Velocity of Circulation (V) . Show your calculations for a full mark. b) Suppose the velocity of circulation is constant (the one you calculated in (a), and the economy’s output of goods and services increases by 5% annually. Calculate Nominal GDP (or what will happen to...
Suppose that the money supply and the nominal GDP for a hypothetical economy are $96 billion and $288 billion, respectively. Instructions: Round your answers to 1 decimal place. a. What is the velocity of money? b. How will households and businesses react if the central bank reduces the money supply by $25 billion? Households and businesses will reduce spending. Households and businesses will increase spending. Households and businesses will not react. c. By how much will nominal GDP have...
Suppose the supply of money, measured by M1, is $2.6 trillion, output, measured by real GDP, is $21.4 trillion, and the velocity of money is 9.4. Suppose the supply of money increases to $4.9 trillion but GDP and the velocity of money do not change. What is the percent by which prices change? Provide your answer as a percentage rounded to two decimal places. Do not include any symbols, such as "$," "=," "%," or "," in your answer.
Consider nominal GDP is 1500 and the money supply is 400. Instructions: Enter numerical values to two decimal places. a) What is the velocity? V = b) If nominal GDP rises to 1600, but the money supply does not change, how has velocity changed? Velocity will (increase/decrease) by to V = c) If GDP now falls back to 1500 and the money supply falls to 350, what is velocity? V =
1.) Suppose that Nominal GDP and velocity in Freedonia are $15 trillion and 3 respectively. -What is the quantity of money in Freedonia? -If the quantity of money increases to $10 trillion, what is the value of nominal GDP required to maintain the equilibrium of the equation of exchange? 2.)Suppose in Freedonia that the following information is available: (Fixed) Aggregate Output = $15 trillion; (Fixed) velocity = 3 and quantity of Money = $5 trillion. What the value of the...
Suppose the price level, as measured by the GDP deflator, is 1.08, the supply of money, measured by M1, is $3.6 trillion, and output, measured by real GDP, is $21.9 trillion. What is the velocity of money? Provide your answer as a number rounded to two decimal places. Do not include any symbols, such as "$," "=," "%," or "," in your answer.