If the monetary base (B) is $1100 billion and the money supply is $7700 billion, Nominal...

Question

Question

If the monetary base (B) is $1100 billion and the money supply is $7700 billion, Nominal...

If the monetary base (B) is $1100 billion and the money supply is $7700 billion, Nominal GDP must be $6,600. The money multiplier must be 7.7. The money multiplier must be 6.6. The money multiplier must be approximately 0.143. The money multiplier must be 7.

business economics

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Answer

Money multiplier =money supply/ monetary base

=7700/1100

=7

The money multiplier is 7

Option 4

Add a comment

Answer 2

Similar Homework Help Questions

rect Question 2 0/1 pts The money supply equals monetary base plus money multiplier. • monetary...

rect Question 2 0/1 pts The money supply equals monetary base plus money multiplier. • monetary base divided by money multiplier. money multiplier divided by monetary base. money multiplier multiplied by monetary base. Incorrect Question 3 0/1 pts If the MI multiplier is 3 and the Fed engages in open-market purchases in the amount of S3 billion. then monetary base will increase by S3 billion decline by S9 billion. decline by S3 billion. • increase by $9 billion. rect Question...
really money supply, monetary base, nominal GDP, real GDPprice level and M1 21. If the capital...

really money supply, monetary base, nominal GDP, real GDPprice level and M1 21. If the capital stock in the country for #19 was 1000 at the end of the previous year, then what was the value for the capital stock at the end of this year? 22. Calculate the value for M1 using the data given below. ANS: M1 = traveler's vault Savings Checking account balances = 2000 checks = 100 Currency in circulation - 1000 cash = 200 Money...
Suppose that the money supply and the nominal GDP for a hypothetical economy are $48 billion...

Suppose that the money supply and the nominal GDP for a hypothetical economy are $48 billion and $336 billion, respectively. If the central bank reduces the money supply by $20 billion, by how much will nominal GDP have to fall to restore equilibrium, according to the monetarist perspective?

I know that the money supply (MS) = money multiplier (m) * the monetary base (B)....

I know that the money supply (MS) = money multiplier (m) * the monetary base (B). MS=m*B B is constant, so changes in m will influence the money supply. I know that m = (cr+1)/(cr+rr). Now, the answer given to us was C. However, wouldn't an increase in cr increase m, not decrease m? For example, say rr is fixed at 2 (the number is arbitrary since it's fixed) and cr is initially 5. Then m = 6/7. If cr...
Suppose that the money supply and the nominal GDP for a hypothetical economy are $96 billion...

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...
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...

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...
13. Suppose the monetary base is B = $800 billion, the reserve-deposit ratio is rd =...

13. Suppose the monetary base is B = $800 billion, the reserve-deposit ratio is rd = 0.1, and the currencydeposit ratio is cd = 0.8. Calculate the value of the currency circulating in the economy (C). a. $89 billion b. $711 billion c. $889 billion d. $1,600 billion 14. Suppose the monetary base is B = $800 billion, the reserve-deposit ratio is rd = 0.1, and the currencydeposit ratio is cd = 0.8. Calculate the money multiplier (m). a. 0.5...
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...

7. A decrease in the nonborrowed monetary base, everything else hela constant( the multiplier the same)...

7. A decrease in the nonborrowed monetary base, everything else hela constant( the multiplier the same) will cause the money supply D. Demand deposits to rise 8. Everything else held constant, a decrease in excess reserves will he money supply to rise c No change in will cause A. The money supply to rise B. The money supply to remain constant C. The money supply to fall D. Checkable deposits to rise 9. If the required reserve ratio is 15...

If the monetary base (B) is $1100 billion and the money supply is $7700 billion, Nominal...

Homework Answers

Add Answer to:
If the monetary base (B) is $1100 billion and the money supply is $7700 billion, Nominal...

Post as a guest

Earn Coins

rect Question 2 0/1 pts The money supply equals monetary base plus money multiplier. • monetary...

really money supply, monetary base, nominal GDP, real GDPprice level and M1 21. If the capital...

Suppose that the money supply and the nominal GDP for a hypothetical economy are $48 billion...

I know that the money supply (MS) = money multiplier (m) * the monetary base (B)....

Suppose that the money supply and the nominal GDP for a hypothetical economy are $96 billion...

Using the quantity Theory of Money formula, suppose that in 2020: Money supply = $50 Billion; Nominal...

Suppose that this years money supply is $500 billion, nominal GDP is $6 trillion, and real...

13. Suppose the monetary base is B = $800 billion, the reserve-deposit ratio is rd =...

Suppose that this year's money supply is $500 billion, nominal GDP is $10 trillion and real...

7. A decrease in the nonborrowed monetary base, everything else hela constant( the multiplier the same)...

If the monetary base (B) is $1100 billion and the money supply is $7700 billion, Nominal...

Homework Answers

Add Answer to: If the monetary base (B) is $1100 billion and the money supply is $7700 billion, Nominal...

Post as a guest

Earn Coins

Add Answer to:
If the monetary base (B) is $1100 billion and the money supply is $7700 billion, Nominal...