4. Velocity and the quantity equation Consider a simple economy that produces only pies. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2018, the money supply was $360, the price of a pie was $9.00, and the economy produced 800 pies. Fill in the missing values in the following table, rounding to the nearest cent when necessary. Quantity of Money Price Level Quantity of Output Nominal GDP (Dollars) Velocity of Money (Dollars) (Pies) (Dollars) Year 2018 360 9.00 800 2019 378 20 800 The money supply grew at a rate of from 2018 to 2019. Since pie output did not change from 2018 to 2019 and the velocity of money the change in the money supply was reflected in changes in the price level. The inflation rate from 2018 to 2019 was
4. Velocity and the quantity equation Consider a simple economy that produces only pies. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2018, the money supply was $360, the price of a pie was $9.00, and the economy produced 800 pies. Fill in the missing values in the following table, rounding to the nearest cent when necessary. Quantity of Money Price Level Quantity of Output Nominal GDP (Dollars) Velocity of Money (Dollars) (Pies) (Dollars) Year 2018 360 9.00 800 2019 378 20 800 The money supply grew at a rate of from 2018 to 2019. Since pie output did not change from 2018 to 2019 and the velocity of money the change in the money supply was reflected in changes in the price level. The inflation rate from 2018 to 2019 was
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter12: Money Growth And Intlation
Section: Chapter Questions
Problem 2CQQ
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Consider a simple economy that produces only pies. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2018, the money supply was $360, the price of a pie was $9.00, and the economy produced 800 pies.
NOTE:
for YEAR 2019, Price Level (Dollars), the choices are (0.47 OR 9.00 OR 9.45 OR 0.50)
nominal GDP options for YEAR 2018 are (85.00 OR 7,560.00 OR 7,200.00 OR 89.00)
nominal GDP options for YEAR 2019 are (89.00 OR 85.00 OR 7,560.00 OR 7,200.00 )
NOTE:
The money supply grew at a rate of _________ (2.44% OR 1.13% OR 5% OR 105%) from 2018 to 2019. Since pie output did not change from 2018 to 2019 and the velocity of money _______ (increased OR decreased OR remained the same), the change in the money supply was reflected ________ (partially OR entirely) in changes in the price level. The inflation rate from 2018 to 2019 was ________ (5% OR 2.44% OR 105% OR 1.13%)
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