The multiplier is an indication of the capacity of money injected in the economy to a. increase investment b. increase welfare c. increase consumption d. increase interest rate e. increase GDP
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- Assume GDP is currently $11,700 billion per year and the quantity of money is $650 billion. What is the velocity of money? The nation collectively holds enough money to finance how many days worth of GDP expenditureExplain the working of money multiplier with helps of a numerical exampleProblem a)Discuss the main functions of money b)Consider that the Ghanaian economy is a Small and close, which ischaracterised by the following.AD=C+I+G+NXC=a+bY*Y*=disposalincomeT=T 0I=I 0G=G0Md/P=Ld(Y,i)Ms=money supply, which is given.AD=Aggregate demand, C=consumption, G=Government expenditure, T=Tax, P= Price level, I=Investment, NX=Net exportsa)Consider an increase in Government spending ∆ > .Assume for now thatboth price and expected price are fixed. Also assume that government doesnot implement any other policy than the increase in Government spending.What is the effect of this policy on the goods market? b)What is the effect on equilibriumin the money market? Present your answer ina well-labelled diagram, showing both money supply and demand before thepolicy was implemented, and that after the policy was implemented in thesame graph. c)Solve for equilibrium in the goods market.d)Suppose the policy change is rather an increase in real money supply not a decrease in government…
- a. If money supply is increased by 10, what will be the new interest rate? Round your answers to one decimal place. Pabst: 5 Numeric ResponseEdit Unavailable. 5 correct.% Kokanee: 6 Numeric ResponseEdit Unavailable. 6 correct.% b. What will be the increase in investment spending as a result of this new interest rate? Pabst: 60 Numeric ResponseEdit Unavailable. 60 incorrect. Kokanee: 50 Numeric ResponseEdit Unavailable. 50 incorrect. c. If the multiplier is 3 in each economy, what will be the increase in GDP? Pabst: Kokanee: d. In which economy would monetary policy be more effective in closing a recessionary gap? Pabst Can you please help with B, CCalculate the value of money multiplier and total deposit created if initial deposit is of $500 million and the LRR is 10%The initial deposit is $400 and the multiplier is 10 Calculate total deposit
- Assume GDP is currently $10,800 billion per year and the quantity of money is $540 billion. a. What is the velocity of money?Q)If a country is currently doing well and experiencing low unemployment, is it likely to have a larger or smaller multiplier than if it were in a recession? A) Smaller B) Larger Explains it correctly and don't copy paste. Only correctly solveIf M1 =$300 Money’s velocity=10 Price level=20 Find real GDP in classical mode
- Consider in a country A: money supply M=3000, price level P=3, inflation expectation andliquidity preference is assumed to be zero to make the calculation simple. The money demandfunctionL(i,Y) =Y−200∗(r+πe). Consumption C=300+0.8*(Y-T)-20*r, investment functionis I=700-80*r, government spending and tax are both 500. (1) Solve the real interest rate and the real GDP in equilibrium. (2) If government spending and tax both increases by 150 to keep the government budgetbalance, what is the new equilibrium real interest rate and the new equilibrium real GDP.Find the value of Money multiplier when MPS=MPCYou are given the following information. Savings S = 150 Investment I = 100 Taxes T = 250 Government Purchases G = 500 Compute the level of private savings, public savings, and national savings.