4. Velocity and the quantity equationConsider a simple economy that produces only pies. The following table contains information on the economy's money supply, velocity of money, pricelevel, and output. For example, in 2019, the money supply was $280, the price of a pie was $7.00, and the economy produced 600 pies.Fill in the missing values in the following table, selecting the answers closest to the values you calculate.Nominal GDPQuantity of Money(Dollars)Price LevelQuantity of OutputYearVelocity of Money(Dollars)(Pies)(Dollars)20192807.0060020202941560The money supply grew at a rete offrom 2019 to 2020. Since pie output dd not change from 2019 to 2020 and the velocty or money2he changen the morey supply was ref ectedin changesin the prre eve. The inflation rate from 2019 to2020 was Consider a simple economy that produces only pies. The following table contains information on the economy's money supply, velocity of money, pricelevel, and output. For example, in 2019, the money supply was $280, the price of a pie was $7.00, and the economy produced 600 pies.Fill in the missing values in the folloselecting the answers closest to the values you ca/culate.1.17%Quantity of MoneyPrice LevelQuantity of OutputNominal GDP(Dollars)2.44%VeYearMoney(Dollars)(Pies)(Dollars)20192807.006002020294600105%The money supply grew at a rate ofy from 2019 to 2020. Since ple output d d not change from 201S to 2020 and the velocty of moneythe changes the mone supply was ref ectedo shanges n the price eve The inflati on rate from 2019 to2020 was

The correct answers of the table are given as :

A. Velocity and the quantity êquatioön 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 2019, the money supply was $280, the price of a pie was $7.00, and the economy produced 600 pies. Fill in the missing values in the following table, selecting the enswers closest to the values you calculate. Quantity of Output (Pies) Quantity of Money Price Level Nominal GDP Year (Dollars) Velocity of Money (Dollars) (Dollars) 2019 280 7.00 600 2020 294 15 600 The money supply grew at a rate of Y from 2019 to 2020. Since pie output did not change from 2019 to 2020 and the velocity of money the change in the money supply was refiected in changes n the price level. The inflation rate from 2019 to 2020 was

A. Velocity and the quantity êquatioön 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 2019, the money supply was $280, the price of a pie was $7.00, and the economy produced 600 pies. Fill in the missing values in the following table, selecting the enswers closest to the values you calculate. Quantity of Output (Pies) Quantity of Money Price Level Nominal GDP Year (Dollars) Velocity of Money (Dollars) (Dollars) 2019 280 7.00 600 2020 294 15 600 The money supply grew at a rate of Y from 2019 to 2020. Since pie output did not change from 2019 to 2020 and the velocity of money the change in the money supply was refiected in changes n the price level. The inflation rate from 2019 to 2020 was

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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 2016, the money supply was 100, the price of a pie was $5.00, and the economy produced 200 pies. Fill in the missing values in the following table, rounding to the nearest cent when necessary. Year Money Supply Velocity of Money Price Level Quantity of Output Nominal GDP (Dollars) (Dollars) (Pies) (Dollars) 2016 100 5.00 200 2017 105 10    200 The money supply grew at a rate of______% from 2016 to 2017. Since pie output did not change from 2016 to 2017 and the velocity of money _______ , the change in the money supply was reflected _________ in changes in the price level. The inflation rate from 2016 to 2017 was _____%.
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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 2019, the money supply was $240, the price of a pie was $7.20, and the economy produced 500 pies. Year Quantity of Money Velocity of Money Price Level Quantity of Output Nominal GDP (Dollars) (Dollars) (Pies) (Dollars) 2019 240 7.20 500 2020 252 15 500 The money supply grew at a rate of from 2019 to 2020. Since pie output did not change from 2019 to 2020 and the velocity of money , the change in the money supply was reflected in changes in the price level. The inflation rate from 2019 to 2020 was .
E4 Assume the real money demand of an economy is:(Md/P) = 2×Yb(r + πe)-awhere 0 < b < 1 and 0 < a < 1.a) Use the real money demand above to determine the velocity of money.b) Does the quantity theory of money hold in this economy? Explain.c) Show with calculus how the velocity of money reacts to a change in output and a changein the nominal interest rate.d) Find the income and the nominal interest rate elasticities of money demand.
Consider the following economy: Labor supply: Nt= 90 Capital stock: Kt = 90 Government spending: Gt = 20 Tax collections: Tt = 20 Production function: Yt = 2(Kt)0.5 (Nt)0.5 Real money demand Lt = 2Yt - 200rt Consumption function: Ct = 16 + 0.8(Yd)t Domestic price level: Pt = 4 Investment function: It = 25 - 50rt Nominal money supply: Mt = 1296 Plot (a)-(d) on the IS-LM and AD-SRAS-LRAS diagrams. Make sure to label (i) the axes, (ii) the curves and (iii) the initial equilibrium levels.
In 2019, an economy produces wheat only and has enough labor, capital, and land to produce 500bushels of wheat (Y or real GDP). Price of wheat and money supply are $2 per bushel and $1,000respectively. In 2020, the central bank increases money supply by $ 1040. Suppose both the velocity ofmoney (V) and the amount of wheat produced remain unchanged. a. Compute the velocity of money and nominal GDP in 2019. b. Calculate inflation rate in year 2020. c. Use a well-labelled money supply-demand diagram to illustrate and explain what happen to the pricelevel and the value of money after such money injection?
Consider a simple economy that produces only cell phones. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2019, the money supply was $240, the price of a cell phone was $7.20, and the economy produced 500 cell phones. Fill in the missing values in the following table, selecting the answers closest to the values you calculate.