BRIEF PRINCIPLES OF MACROECON.-ACCESS
BRIEF PRINCIPLES OF MACROECON.-ACCESS
7th Edition
ISBN: 9781305096592
Author: Mankiw
Publisher: CENGAGE L
Question
Book Icon
Chapter 12, Problem 1PA

Subpart (a):

To determine

Money supply, price level, and velocity.

Subpart (b):

To determine

Money supply, price level, and velocity.

Subpart (c):

To determine

Money supply, price level, and velocity.

Subpart (d):

To determine

Money supply, price level, and velocity.

Blurred answer
Students have asked these similar questions
Suppose that this year’s money supply is $500 billion, nominal GDP is $10 trillion, and real GDP is $5 trillion.a. What is the price level? What is the velocity of money?b. Suppose that velocity is constant and the economy’s output of goods and services rises by 5 percent each year. What will happen to nominal GDP and the price level next year if the Fed keeps the money supply constant.c. What money supply should the Fed set next year if it wants to keep the price level stable?d. What mone
In the country of Sparta, mnoney supply equals 13 million drams, real GDP is 65 million drams, the price level is 1.2, and the velocity of money is 6. a. What is the value of its nominal GDP? Nominal GDP: $ million drams. b. If, in the next year, V remains constant and real GDP increases to 78 million drams, what must happen to money supply in order to keep prices stable? Round your answer below to 1 decimal place. Money supply must (Click to select) v to $ million drams.
Suppose that this year's money supply is $600 billion, nominal GDP is $15 trillion, and real GDP is $3 trillion. The price level is   , and the velocity of money is   .   Suppose that velocity is constant and the economy's output of goods and services rises by 4 percent each year. Use this information to answer the questions that follow. If the Fed keeps the money supply constant, the price level will    , and nominal GDP will    .   True or False: If the Fed wants to keep the price level stable instead, it should keep the money supply unchanged next year. True   False     If the Fed wants an inflation rate of 9 percent instead, it should    the money supply by   . (Hint: The quantity equation can be rewritten as the following percentage change formula: (Percentage Change in M)+(Percentage Change in V)=(Percentage Change in P)+(Percentage Change in Y)Percentage Change in M+Percentage Change in V=Percentage Change in P+Percentage Change in Y.)
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Brief Principles of Macroeconomics (MindTap Cours...
Economics
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning