What is the effect on velocity if Congress outlaws the use of credit cards?

Q: If GDP is1,500 and the money supply is 400,what is velocity?

A: The quantity theory of money establishes the direct and proportional relationship between the price…

Q: Using the equation of velocity of money, you need to give an example of a "transaction" and…

A: Below is the formula to find the velocity of money:Velocity of Money=P×YMM=Money…

Q: What is the significance of liquidity with respect to money supply and money demand?

A: As the Central bank tightens the monetary policy, it removes liquidity from the economy by selling…

Q: In the third quarter of 2020, U.S. GDP was $18,583 while full-employment GDP is an estimated…

A: The central bank controls the short-term interest rate as an operational target through the use of…

Q: If the Fed has decided to change the federal funds rate target, the main interest rate they use to…

A: The Federal Reserve System, also known as the Fed is the Central Bank of the United States. It…

Q: Use the concept of opportunity cost to explain why velocity is higher at higher interest rates

A: Potential profits foregone when one alternative is chosen over another are referred to as…

Q: To what extent was the Fed being responsible for the housing price bubble of the early 2000s.

A: The housing price bubble of early 2000s further led to subprime crisis which was majorly responsible…

Q: If nominal GDP is 1,521 billion and the money supply is 661 billion, then what is velocity? Please…

A: Nominal GDP measures a country's gross domestic product mistreatment current costs, while not…

Q: The focus of monetary policy nowadays is by using interest rate as an indicator.  True  False

A: Monetary policy is used by the central bank to regulate the money supply in the economy.

Q: Why does the Keynesian view of the demand for moneysuggest that velocity is unpredictable?

A: The velocity of money (V) is the rate at which money is exchanged in an economy for goods and…

Q: What do economists mean when they say that monetary policy can exhibit cyclical asymmetry? Why is…

A: Cyclical asymmetry alludes to the condition that a tight monetary policy (strategy) is generally…

Q: Keynes's model of the demand for money suggests that velocity is related to A. negatively, interest…

A: Keynes does not believe that velocity of money is constant, he firmly believes that velocity of…

Q: “If nominal GDP rises, velocity must rise.” Is this statement true, false, or uncertain? Explain…

A: The GDP is the summation of the money value of all the final goods and services produced within the…

Q: Compute nominal GDP if velocity remains constant at 5 and the money supply increases from GHS200bn…

A: Initially, the money supply (M) is 200 billionThe velocity of money(V) is 5 To get the nominal GDP…

Q: Throughout much of the current year 2020, Canada has been experiencing declining energy prices.…

A: The economy is said to be operating in its long-run equilibrium at a point where all the three…

Q: What happens to the money supply when the Fed buys government bonds? According to the theory of…

A: MONEY SUPPLY Money supply refers to the volume of currency regulated in the economy during a period…

Q: How does a delay in spending due to the uncertain political climate affect velocity and income?

A: In an economy, velocity of money refers to the concept that provide information a oi the circulation…

Q: why is the speculative demand for money an inverse relationship between interest rates and the…

A:

Q: If the money supply is $250 billion and nominal GDP is $1 trillion, the velocity of money is: Group…

A: Money velocity can be described as the rate at which money moves through an economy. In simple…

Q: Using the quantity​ equation, if the velocity of money grows at 5​ percent, the money supply grows…

A: The quantity theory of money refers to the relationship between output, prices, and money that is…

Q: happens to nominal GDP if the money supply grows by 20% but velocity declines by 27%? Nominal GDP…

A: Equation of Exchange is  MV =PY where M is money supply  V is velocity P is price level Y is real…

Q: The speculative demand for money is an inverse relationship between interest rates and the demand…

A: Speculative demand for money is one of the three motive of demand for money put forward by J M…

Q: According to the data, output growth in the United States has averaged around 3%, inflation has…

A: The quantity theory of money explains the relationship between the nominal money supply determine by…

Q: What happens to nominal GDP if the money supplygrows by 17% but velocity declines by 24%?

A: Given,   Rise in money supply = 17%  Velocity falls = 24%

Q: Consider the portfolio choice theory of money demand. How do you think the demand for money would be…

A: (Q) Consider the portfolio choice theory of money demand. How do you think the demand for money…

Q: Describe the impact of financial innovations on the demand for money and velocity.

A: Financial innovation refers to the process of innovating the products and services along with the…

Q: Explain the main theories of central bank behaviour.

A: Main theories of central bank behavior 1)Monetary stability For monetary stability,central bank may…

Q: Suppose a country's nominal GDP is $120 billion. The money supply is $100 billion. What is the…

A: GDP is the value of the basket of goods and services produced within the borders of a country at a…

Q: How stable is the velocity of money?

A: Velocity of Money is the component of Fisher's Quantity theory of money. It helps to measure the…

Q: Calculate what the federal funds rate should be using the Taylor Rule

A: The Taylor rule (also known as Taylor's rule or Taylor principle) is an econometric model that…

Q: According to the equation of exchange, if the money supply is $700 million, real GDP is $1,600…

A: The Fisher equation for the quantity theory of money can be written as - MV = PY  where, M = money…

Q: If credit cards were made illegal by congressional legislation, what would happen to velocity?…

A: Quantity theory of money states the price level and money supply are directly proportional to each…

Q: What is the relationship between the velocity of money and the Cambridge k ?

A: The Cambridge cash balance approach use K as the parameter that represent nominal income share which…

Q: According to the simple Quantity Theory of Money, if velocity is constant and real GDP grows by 2%…

A: "According to the quantity theory of money, there exists a relation between real GDP (Y), velocity…

Q: What methods can be used by the FED to influence interest rates? Are these methods effective?

A: Please find the answer below.

Q: How does money velocity contribute to the observation that in countries with high rates of…

A: The rate at which money is traded in an economy is measured by the velocity of money. It refers to…

Q: Suppose that the money supply will grow by 2% in Japan over the next five years. Velocity is…

A: Given: Growth in money supply=2% Velocity=constant Growth in real income=3%

Q: Suppose the velocity of money is stable for a year in Germany. If real GDP  grows by 2%, what is the…

A: Quantity theory of money states that money supply and price level in an economy are in direct…

Q: The only one interest rate in the economy the Fed can control directly is the FFR. True False

A: Federal Fund Rates (FFR): It is the interests that the commercial banks charges to lend and borrow…

Q: Why is Keynes’s analysis of the speculative demand formoney important to his view that velocity will…

A: According to Keynes individuals holds money for three purposes Transactions demand for money:…