4. Velocity and the quantity equation Consider a simple economy that produces only jean jackets. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2020, the money supply was $400, the price of a jean jacket was $12.50, and the economy produced 800 jean jackets. Fill in the missing values in the following table, selecting the answers closest to the values you calculate. Quantity of Money (Dollars) Quantity of Output (Jean jackets) 400 Year 2020 2021 408 Velocity of Money The money supply grew at a rate of money 2020 to 2021 was 25 Price Level (Dollars) 12.50 800 800 Nominal GDP (Dollars) from 2020 to 2021. Since jean jacket output did not change from 2020 to 2021 and the velocity of the change in the money supply was reflected in changes in the price level. The inflation rate from

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Chapter16: The Influence Of Monetary And Fiscal Policy On Aggregate Demand
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4. Velocity and the quantity equation
Consider a simple economy that produces only jean jackets. The following table contains information on the economy's money supply, velocity of
money, price level, and output. For example, in 2020, the money supply was $400, the price of a jean jacket was $12.50, and the economy produced
800 jean jackets.
Fill in the missing values in the following table, selecting the answers closest to the values you calculate.
Quantity of Money
(Dollars)
Quantity of Output
(Jean jackets)
400
Year
2020
2021
408
Velocity of Money
The money supply grew at a rate of
money
2020 to 2021 was
25
Price Level
(Dollars)
12.50
800
800
Nominal GDP
(Dollars)
from 2020 to 2021. Since jean jacket output did not change from 2020 to 2021 and the velocity of
the change in the money supply was reflected
in changes in the price level. The inflation rate from
Transcribed Image Text:4. Velocity and the quantity equation Consider a simple economy that produces only jean jackets. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2020, the money supply was $400, the price of a jean jacket was $12.50, and the economy produced 800 jean jackets. Fill in the missing values in the following table, selecting the answers closest to the values you calculate. Quantity of Money (Dollars) Quantity of Output (Jean jackets) 400 Year 2020 2021 408 Velocity of Money The money supply grew at a rate of money 2020 to 2021 was 25 Price Level (Dollars) 12.50 800 800 Nominal GDP (Dollars) from 2020 to 2021. Since jean jacket output did not change from 2020 to 2021 and the velocity of the change in the money supply was reflected in changes in the price level. The inflation rate from
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