Homework Answers
MV=PT
PT=Y
MV=Y
Y=Real GDP
M=Money supply
V=Velocity of money
V=Y/M
V=5/2.5
V=2
Answer-A
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21. In a small economy, the quantity of money circulating in the economy is $2.5 million...
In the imaginary economy of Smartland the money supply in year 2018 was $100. Their Real...
In the imaginary economy of Smartland the money supply in year 2018 was $100. Their Real GDP was $200 and the Nominal GDP was calculated as $800. Calculate the Velocity and the price level for this economy a Velocity = $; Price Level - 2 Velocity 8. Price Levels Velocity Price Level 4 od Velocity = 4: Price Level = 4 Value of Money MS MS2 Money Demand Quantity of Money Refer to Figure. In the above figure assume that...
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Using the quantity Theory of Money formula, suppose that in 2020: Money supply = $50 Billion; Nominal...
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Using the quantity Theory of Money formula, suppose that in 2020: Money supply = $50 Billion;...
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• if the velocity of money is 2, the money supply in this economy is ($4.5 trillion/ $18 trillion/ $27 trillion/ $3...
• if the velocity of money is 2, the money supply in this
economy is ($4.5 trillion/ $18 trillion/ $27 trillion/ $36
trillion/ $45trillion /$54 trillion)
•because ( the federal reserve controls M/ velocity is assumed
to be constant/ the AD curve is downward sloping ), the percentage
increase in the price level Is ( less then/ the same as/ greater
then ) the percentage increase im the money supply. the illustrates
the ( importance of the federal reserve /...
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3. A small economy starts the year with $1001100 in capital. During the course of the...
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1) Show the quantity equation. Calculate velocity of money for each year. (3 points) 2) Can...
1) Show the quantity equation. Calculate velocity of money for
each year. (3 points)
2) Can you turn quantity equation into the quantity theory of
money? Why? Or Why not? (2 points)
3) Calculate an inflation rate from 2019 to 2020 by using the
quantity theory of money equation, which means that percentage
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Year Money Supply (Trillions) Price Level (GDP deflator) Real GDP (Trillions)...
In the imaginary economy of Smartland the money supply in year 2018 was $100. Their Real GDP was $200 and the Nominal GDP was calculated as $800. Calculate the Velocity and the price level for this economy a Velocity = $; Price Level - 2 Velocity 8. Price Levels Velocity Price Level 4 od Velocity = 4: Price Level = 4 Value of Money MS MS2 Money Demand Quantity of Money Refer to Figure. In the above figure assume that...
10. Which of the following statements is (are) correct? (x) The quantity equation is specified as MXV = PxY. Where P is the price level, M is the money supply V is the velocity of money. Y is real output and PX Y is nominal output. ly) The velocity of money is the calculated as the average number of times per year a dollar is spent (z) Based on the quantity equation, if P = 3.0. Y = 1,000 million,...
• if the velocity of money is 2, the money supply in this
economy is ($4.5 trillion/ $18 trillion/ $27 trillion/ $36
trillion/ $45trillion /$54 trillion)
•because ( the federal reserve controls M/ velocity is assumed
to be constant/ the AD curve is downward sloping ), the percentage
increase in the price level Is ( less then/ the same as/ greater
then ) the percentage increase im the money supply. the illustrates
the ( importance of the federal reserve /...
3. A small economy starts the year with $1001100 in capital. During the course of the year, gross investment is $151100and depreciation is $56800. How big is the economy's stock of capital at the end of the year? 4. The following data show nominal GDP and the appropriate price index for several years. Compute real GDP for each year and indicate whether you have "inflated" or "deflated" nominal GDP in finding real GDP. All GDP are in billions. Nominal GDP...
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each year. (3 points)
2) Can you turn quantity equation into the quantity theory of
money? Why? Or Why not? (2 points)
3) Calculate an inflation rate from 2019 to 2020 by using the
quantity theory of money equation, which means that percentage
change in price level is equal to money growth rate minus economic
growth rate. (2 points)
Year Money Supply (Trillions) Price Level (GDP deflator) Real GDP (Trillions)...
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