Venezuela has financed much of its government expenditures with an ever-increasing money supply (“printing money”) and...
Venezuela has financed much of its government expenditures with an ever-increasing money supply (“printing money”) and as also suffered from surging inflation. Use the equation of exchange to explain the cause and effect.
Homework Answers
Equation of exchange
Money Supply*Velocity = Price* Real GDP
In Venezuelaconsider velocity of money and real GDP is constant and with the increase in money supply, the price level increased to a huge extent with which the regular goods for household items got to increase in the price level in a great rate and this is termed as hyper inflation and with this there is a fall in the value of the currency against US Dollar and with the total economy collapse all in all
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Venezuela has financed much of its government expenditures with
an ever-increasing money supply (“printing money”) and...
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4. Which of the following statements about monetary neutrality is accurate? (x) Printing money to finance government expenditures has profound effects on real variables in the long run, but is neutral in the short run. (y) Although monetary policy is neutral in the long run, it may effect real variables in the short run. (z) In the long run when money is neutral, nominal interest rates increase when the money supply growth rate increases, but real interest rates do not....
Since 2008, the money supply has almost quadrupled, going from $1.4t to $5.3t. At the same...
Since 2008, the money supply has almost quadrupled, going from
$1.4t to $5.3t. At the same time, the Real GDP (the actual amount
of goods and services produced by the economy has increased by a
modest 23%, equivalent to an average growth of just under 2% per
year.
We expect that a large increase in the money supply without a
corresponding increase in the Real GDP would cause a very large
increase in inflation. In fact, since 2008 inflation has...
Since 2008, the money supply has almost quadrupled, going from $1.4t to $5.3t. At the same...
Since 2008, the money supply has almost quadrupled, going from
$1.4t to $5.3t. At the same time, the Real GDP (the actual amount
of goods and services produced by the economy has increased by a
modest 23%, equivalent to an average growth of just under 2% per
year.
We expect that a large increase in the money supply without a
corresponding increase in the Real GDP would cause a very large
increase in inflation. In fact, since 2008 inflation has...
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1.
2.
If the Fed wants to reduce the money supply through open
market operations, it will
Select the correct answer below :
sell bonds
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reduce the discount rate
3.
A growing debt/GDP ratio could mean that, all else the
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Select the correct answer below:
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Since 2008, the money supply has almost quadrupled, going from
$1.4t to $5.3t. At the same time, the Real GDP (the actual amount
of goods and services produced by the economy has increased by a
modest 23%, equivalent to an average growth of just under 2% per
year.
We expect that a large increase in the money supply without a
corresponding increase in the Real GDP would cause a very large
increase in inflation. In fact, since 2008 inflation has...
Since 2008, the money supply has almost quadrupled, going from
$1.4t to $5.3t. At the same time, the Real GDP (the actual amount
of goods and services produced by the economy has increased by a
modest 23%, equivalent to an average growth of just under 2% per
year.
We expect that a large increase in the money supply without a
corresponding increase in the Real GDP would cause a very large
increase in inflation. In fact, since 2008 inflation has...
080302 Monetary neutrality implies that an increase in the quantity of money will increase employment increase the price level increase the incentive to save. not increase any of the above. QUESTION 5 080304 The classical dichotomy argues that changes in the money supply affect both nominal and real variables. affect neither nominal nor real variables. affect nominal variables, but not real variables. do not affect nominal variables, but do affect real variables. QUESTION 6 080305 According to the principle of...
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1.
2.
If the Fed wants to reduce the money supply through open
market operations, it will
Select the correct answer below :
sell bonds
buy bonds
Oreduce the required reserves ratio
reduce the discount rate
3.
A growing debt/GDP ratio could mean that, all else the
same,
Select the correct answer below:
the government is running large budget deficits
the government is paying down the debt
government expenditures are less than tax revenues.
the economy is in a growth...
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