According to the quantity theory of money, when the money supply doubles, which of the following...
According to the quantity theory of money, when the money supply doubles, which of the following variables doubles?
a. The real interest rate.
b. The velocity of money.
c. The price level.
d. The real GDP
Homework Answers
c. The price level- is correct
According to quantity theory of money, if velocity and outwrwmain the same, increase in money leads to equal proportional increase in the price level.
Add Answer to:
According to the quantity theory of money, when the money supply
doubles, which of the following...
38. According to the quantity theory of money, the inflation rate equals A) money supply minus...
38. According to the quantity theory of money, the inflation rate equals A) money supply minus real GDP. 8) the growth rate of the money supply minus the growth rate of real GDP, C) real GDP minus the money supply. D) the growth rate of real GDP minus the growth rate of the money supply of money pre rate than reacop. A) money supporowing at a fidower rate the 39. The quantity theory of money predicts that in the long...
QUESTION 10 According to the quantity theory of money, if the money supply, M, increases by...
QUESTION 10 According to the quantity theory of money, if the money supply, M, increases by 10%, then A. velocity increases by 10%. B. the rate of inflation (in %) increases by 10. C. the nominal GDP increases by 10%. D. none of the above. 10 points QUESTION 11 According to the quantity theory of money and the classical model, changes in nominal money supply, M, has A. no effect on real variables. B. no effect on inflation rate....
QUESTION 5 According to the quantity theory of money, a 10% increase in the quantity of...
QUESTION 5 According to the quantity theory of money, a 10% increase in the quantity of money ultimately leads to a 10% increase in __________. a. disposable income b. real GDP c. unemployment rate d. the price level
According to the Purchasing Power Parity Theorem and the Quantity Theory of Money, other things being...
According to the Purchasing Power Parity Theorem and the Quantity Theory of Money, other things being equal, which of the following would cause the price of UK pound (r = US$/UKpound) to fall: a) A decrease in U.S. real GDP b) A decrease U.K. inflation rate c) An increase in U.S. inflation rate d) A decrease in U.S. money supply e) a decrease in UK money supply
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...
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...
1. Friedmania is a country in which the quantity theory of money operates. The country has...
1. Friedmania is a country in which the quantity theory of money operates. The country has a constant population, capital stock, and technology so real GDP does not change. In 2008 real GDP was S500 mllon, the price level, measured by the GDP deflator, was 150 and the velocity of circulation of money was 10. (Because the price level is measured by the GDP deflator, it must be divided by 100 before it is used in the equation of exchange.)...
According to the quantity theory, the size of the money determines the price level. Assume the following: - The rate of...
According to the quantity theory, the size of the money determines the price level. Assume the following: - The rate of circulation of the money (): 14 - The money supply in year 1 (: 600 billion - Money supply in year 2 (636 billion - GDP in year 1 (: 4200 billion - GDP in year 2 (: 4343 billion Calculate inflation between year 1 and year 2!
According to the quantity theory of money, in the long run
According to the quantity theory of money, in the long run A. an increase in the quantity of money creates an increase in real GDP B. the quantity of money in a society will always be just the right amount. C. an increase in the quantity of money creates an increase in prices but no additional increase in real GDP D. None of the above answers are correct.
4. Money growth and inflation. Use the quantity theory of money to answer the following questions...
4. Money growth and inflation. Use the quantity theory of money to answer the following questions (a) (3 points) Assuming that the velocity of money is constant, if a country has an average annual growth rate of real GDP equal to 6%, then what is the average annual rate of money growth that would required to produce an average rate of inflation of 3%? Show your work. (b) (3 points) True or false: According to the quantity theory of money,...
38. According to the quantity theory of money, the inflation rate equals A) money supply minus real GDP. 8) the growth rate of the money supply minus the growth rate of real GDP, C) real GDP minus the money supply. D) the growth rate of real GDP minus the growth rate of the money supply of money pre rate than reacop. A) money supporowing at a fidower rate the 39. The quantity theory of money predicts that in the long...
1. Friedmania is a country in which the quantity theory of money operates. The country has a constant population, capital stock, and technology so real GDP does not change. In 2008 real GDP was S500 mllon, the price level, measured by the GDP deflator, was 150 and the velocity of circulation of money was 10. (Because the price level is measured by the GDP deflator, it must be divided by 100 before it is used in the equation of exchange.)...
4. Money growth and inflation. Use the quantity theory of money to answer the following questions (a) (3 points) Assuming that the velocity of money is constant, if a country has an average annual growth rate of real GDP equal to 6%, then what is the average annual rate of money growth that would required to produce an average rate of inflation of 3%? Show your work. (b) (3 points) True or false: According to the quantity theory of money,...
Most questions answered within 3 hours.
-
SQL help:
Design a database diagram for a database that stores information
about the Downloads that...
asked 39 minutes ago -
In 1970s and 1980s, molecular biologists discovered that the
hormone testosterone, binds a receptor protein that...
asked 2 hours ago -
january 1 2010 road catering service purchase a piece of
equipment for 58000 which is expected...
asked 3 hours ago -
Explain Mertons concept of anomie is and what the
modes of adaptation to it are?
asked 4 hours ago -
Jamie is doing a survey at her school about whether the students
feel the cafeteria food...
asked 5 hours ago -
How many liters of 0.669 M KOH will be needed to raise the pH of
0.339...
asked 7 hours ago -
A liquid of density 1270 kg/m 3 flows steadily through a pipe of
varying diameter and...
asked 8 hours ago -
Questions: What should the American executive do?
'A visiting American executive finds that a foreign subsidiary...
asked 7 hours ago -
Activity based costing was introduced as an alternative to
absorption costing.
1. Discuss using illustration the...
asked 8 hours ago -
1. You own shares of Crane DVD Company and are interested in
selling them. With so...
asked 8 hours ago -
How many grams of He are necessary to fill a balloon having a
volume of 4.5E3...
asked 8 hours ago -
The 2 patients, still in the hospital, were interviewed by a
MoH epidemiologist. The interviews revealed...
asked 8 hours ago