Suppose that this years money supply is $500 billion, nominal GDP is $6 trillion, and real...
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 year if it wants to keep the price level stable?
d. What money supply should the Fed set next year if it wants inflation of 5%?
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Suppose that this years money supply is $500 billion, nominal
GDP is $6 trillion, and real...
Suppose that this year's money supply is $500 billion, nominal GDP is $10 trillion and real...
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...
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...
Using the quantity Theory of Money formula, suppose that in 2020: Money supply = $50 Billion;...
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...
Question 20 (6 points) Suppose full employment real GDP is $1,000 billion and the money supply...
Question 20 (6 points) Suppose full employment real GDP is $1,000 billion and the money supply is $800 billion. Suppose also that the monetary velocity is constant and equal to 5. What is the price level? _.00 Now suppose the Fed increases the money supply by 4% and potential real GDP rises by 3%. In the long run, the inflation rate would be _.00% A/
Page 2 Suppose full employment real GDP is $1,000 billion and the money supply is $800...
Page 2 Suppose full employment real GDP is $1,000 billion and the money supply is $800 billion. Suppose also that the monetary velocity is constant and equal to 5. What is the price level? 00 Page 3: Now suppose the Fed increases the money supply by 4% and potential real GDP rises by 3%. In the long run, the inflation rate would be 00% Page 4 Previous Page Next Page Page 9 of 28 Page 5: Submit Quiz 26 of...
If real GDP is $ 2.0 trillion, the money supply is $ 500 billion, and the...
If real GDP is $ 2.0 trillion, the money supply is $ 500 billion, and the price level is 1.75, we know that velocity is
Question 28 (5 points) Saved Suppose full employment real GDP is $2,000 billion and the money...
Question 28 (5 points) Saved Suppose full employment real GDP is $2,000 billion and the money supply is $1,000 billion. Suppose also that the monetary velocity is constant and equal to 4. What is the price level? 2 Now suppose the Fed increases the money supply by 6% and potential real GDP rises by 3%. In the long run, the inflation rate would be .00% Previous Page Next Page Page 28 of 31 Submit Quiz 29 of 31 questions saved
Suppose this year’s money supply is $100, nominal GDP is $1500, and real GDP is $500....
Suppose this year’s money supply is $100, nominal GDP is $1500, and real GDP is $500. What is the price level? What is the velocity of money? What does this velocity of money mean?
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 th...
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...
• 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 /...
Question 20 (6 points) Suppose full employment real GDP is $1,000 billion and the money supply is $800 billion. Suppose also that the monetary velocity is constant and equal to 5. What is the price level? _.00 Now suppose the Fed increases the money supply by 4% and potential real GDP rises by 3%. In the long run, the inflation rate would be _.00% A/
Page 2 Suppose full employment real GDP is $1,000 billion and the money supply is $800 billion. Suppose also that the monetary velocity is constant and equal to 5. What is the price level? 00 Page 3: Now suppose the Fed increases the money supply by 4% and potential real GDP rises by 3%. In the long run, the inflation rate would be 00% Page 4 Previous Page Next Page Page 9 of 28 Page 5: Submit Quiz 26 of...
Question 28 (5 points) Saved Suppose full employment real GDP is $2,000 billion and the money supply is $1,000 billion. Suppose also that the monetary velocity is constant and equal to 4. What is the price level? 2 Now suppose the Fed increases the money supply by 6% and potential real GDP rises by 3%. In the long run, the inflation rate would be .00% Previous Page Next Page Page 28 of 31 Submit Quiz 29 of 31 questions saved
• 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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