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If nominal
a. 333
b. 5
c. 3
d. 7500
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- If the money supply is $60 billion, the velocity of money is 7, and real GDP is $280 billion, then the price level equals: O 0.67. A.1.50. B.4.67. C.28. D. 1.25. E. 2.5All other things being equal, by how much will nominal GDP expand if the central bank increases the money supply by $110 billion, and the velocity of money is 3.2? (Enter your answer in billions of dollars. That is, if you find an expansion of 1 billion enter 1 for your answer.)Suppose that the Price level = 120, Supply of Money = $20 billion, and Real GDP = $4 billion. If the velocity of the money stays the same but Real GDP increases by 5%, what will happen to the price level if the supply of money increases by $5 billion? Select one: a. It will increase to 142.9 b. It will increase to 135.4 c. It will increase to 128.5 d. It will increase to 122.5 e. It will stay 120. These changes are offsetting
- If real GDP is $40 billion, the price level 30, and the velocity of money is 24, what does the supply of money equal? Select one: a. $40 billion b. $50 billion c. $60 billion d. $75 billion e. $80 billionWe would expect that the level of income that would equate total demand for and total supply of money would be: (a) roughly at the level of the Fed’s interest rate target; (b) lower the lower the interest rates; (c) equal to the level that would equate realized investment with realized savings; (d) higher the lower the interest rate (or lower the higher the interest rate)Suppose that the Price level = 115, Supply of Money = $60 billion, and Real GDP = $12 billion. What does the velocity of money equal? Select one: a. 30 b. 23 c. 20 d. 18 e. 15
- Suppose Canada’s money supply increases by 3% and the GDP grows by 4% in 2023. Based on the quantity theory of money, Canada should experience a. an inflation rate of 3%. b. an inflation rate of 1%. c. a deflation rate of 3%. d. a deflation rate of 1%.Assume that the money demand function is (M / P)d = 2,200 – 200r, where r is the interest rate in percent. If the price level is fixed at P=2, and the Fed wants to fix the interest rate at 7 percent, it should set the money supply at: a. 2,000. b. 1,800. c. 1,600. d. 1,400........ implies that an increase in .... will increase ...... a) neutrality of money / inflation / real interest rates b) inflation / prices / both saving and investment c) neutrality of money / the money supply / nominal interest rates d) inflation / prices / real GDP e) neutrality of money / the money supply / real interest rates
- .......... implies that an increase in .......... will increase ........... a.Neutrality of money/inflation / real interest rates, b.Inflation / prices / both saving and investment c.Neutrality of money/ the money supply / nominal interest rates. d.Inflation / prices / real GDP e.Neutrality of money / the money supply / real interest ratesQUESTION THREE Assuming a constant velocity of money while the money supply is growing 10% per year, real GDP is growing at 4% per year, and the real interest rate is r = 8%. Assume that actual Inflation is equal to expected inflation. a) Find the value of the nominal interest rate in this economy b) If the central bank increases the money growth rate by 4% per year, find the change in the nominal interest rate Ai C) Suppose the growth rate of Y falls to 2% per year. What will happen to inflation? What must the central bank do if it wishes to keep inflation constant?Consider a situation where the central bank increases the money supply. All other things being equal, if nominal GDP increased by $800 billion during a time when velocity was 4, by how much did the central bank increase the money supply? $200 million $400 million $400 billion $200 billion
