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
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
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter16: The Influence Of Monetary And Fiscal Policy On Aggregate Demand
Section: Chapter Questions
Problem 5PA
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