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 2018, the money supply was $280, the price of a cell phone was $7.00, and the economy produced 600 cell phones. Fill in the missing values in the following table, selecting the answers closest to the values you calculate
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 2018, the money supply was $280, the price of a cell phone was $7.00, and the economy produced 600 cell phones. Fill in the missing values in the following table, selecting the answers closest to the values you calculate
Chapter14: Macroeconomic Policy: Tradeoffs, Expectations, Credibility, And Sources Of Business Cycles
Section: Chapter Questions
Problem 8E
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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 2018, the money supply was $280, the price of a cell phone was $7.00, and the economy produced 600 cell phones.
Fill in the missing values in the following table, selecting the answers closest to the values you calculate.
Year
|
Quantity of Money
|
Velocity of Money
|
Price Level
|
Quantity of Output
|
Nominal
|
---|---|---|---|---|---|
(Dollars)
|
(Dollars)
|
(Cell phones)
|
(Dollars)
|
||
2018 | 280 |
|
7.00 | 600 | |
2019 | 294 | 15 | 600 |
The money supply grew at a rate of_____ from 2018 to 2019. Since cell phone 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 ______ .
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