EBK BRIEF PRINCIPLES OF MACROECONOMICS
7th Edition
ISBN: 9780100469884
Author: Mankiw
Publisher: YUZU
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Question
Chapter 12, Problem 3QR
To determine
Nominal and real variables.
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Consider the simple quantity theory of money. Which variables are exogenous?(Choose one or more.)A The stock of money.B The demand to hold money.C The (exchange) value of money.D The purchasing power of money.E The average level of prices.
A) What is the notable insight of the Quantity Theory of money?
(a) An Increase in the quantity of money, ceteris paribus will result in inflation
(b) A decrease in the quantity of money, ceteris paribus will result in inflation
(c) An Increase in the quantity of goods and services, ceteris paribus will result in inflation
(d) An Increase in the demand for money holding, ceteris paribus will result in inflation
B) What is the primary purpose of the interest rate in Bagehot's rule?
(a) To increase the revenue of the government
(b) To decrease uncertainity
(c) To eliminate moral hazard
(d) To increase the revenue of the central bank
What’s the difference between Nominal and Real variables in monetary policy?
Chapter 12 Solutions
EBK BRIEF PRINCIPLES OF MACROECONOMICS
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- Do not give written explanations. Provide graphical solutions, circled answers or solve mathematical problems (show ALL work) Much economic news we read about can be reinterpreted into our “M v = P Y” Take each of the following news headlines below and determine that event changes (increase or decrease) in: M or v or P or Y based on your understanding of monetary theory. You answer each situation by simply listing the one variable from the equation you think has changed—only ONE. Use and upward or downward arrow next to the one variable to indicate if the change was an increase or decrease. “Deposits in U.S. banks fell in 2015.”arrow_forwardIs it possible that money supply can be more than the money demand (this means that we can have too much money)?arrow_forwardDo not give written explanations. Provide graphical solutions, circled answers or solve mathematical problems (show ALL work) Much economic news we read about can be reinterpreted into our “M v = P Y” Take each of the following news headlines below and determine that event changes (increase or decrease) in: M or v or P or Y based on your understanding of monetary theory. You answer each situation by simply listing the one variable from the equation you think has changed—only ONE. Use and upward or downward arrow next to the one variable to indicate if the change was an increase or decrease. “Workers produced 4% more output per hour last year.”arrow_forward
- Do not give written explanations. Provide graphical solutions, circled answers or solve mathematical problems (show ALL work) Much economic news we read about can be reinterpreted into our “M v = P Y” Take each of the following news headlines below and determine that event changes (increase or decrease) in: M or v or P or Y based on your understanding of monetary theory. You answer each situation by simply listing the one variable from the equation you think has changed—only ONE. Use and upward or downward arrow next to the one variable to indicate if the change was an increase or decrease. Prices of most consumer goods rose 12% last year.”arrow_forwardDo not give written explanations. Provide graphical solutions, circled answers or solve mathematical problems (show ALL work) Much economic news we read about can be reinterpreted into our “M v = P Y” Take each of the following news headlines below and determine that event changes (increase or decrease) in: M or v or P or Y based on your understanding of monetary theory. You answer each situation by simply listing the one variable from the equation you think has changed—only ONE. Use and upward or downward arrow next to the one variable to indicate if the change was an increase or decrease. “Real GDP increased 32% in the last decade.”arrow_forwardDo not give written explanations. Provide graphical solutions, circled answers or solve mathematical problems (show ALL work) Much economic news we read about can be reinterpreted into our “M v = P Y” Take each of the following news headlines below and determine that event changes (increase or decrease) in: M or v or P or Y based on your understanding of monetary theory. You answer each situation by simply listing the one variable from the equation you think has changed—only ONE. Use and upward or downward arrow next to the one variable to indicate if the change was an increase or decrease. “American businesses are spending faster than ever.”arrow_forward
- By using graphs, show and explain how an increase in money supply can affect the goods market by taking the link between two markets into account.arrow_forwardDo not give written explanations. Provide graphical solutions, circled answers or solve mathematical problems (show ALL work) Much economic news we read about can be reinterpreted into our “M v = P Y” Take each of the following news headlines below and determine that event changes (increase or decrease) in: M or v or P or Y based on your understanding of monetary theory. You answer each situation by simply listing the one variable from the equation you think has changed—only ONE. Use and upward or downward arrow next to the one variable to indicate if the change was an increase or decrease. “Deposits in U.S. banks fell in 2015.” “American businesses are spending faster than ever.” “Prices of most consumer goods rose 12% last year.” “Workers produced 4% more output per hour last year.” “Real GDP increased 32% in the last decade.” “Deflation grips the economy and households put off shopping” “A hyperinflation grips the US and people try to spend before prices…arrow_forwardName a couple of “players” in the monetary supply process.arrow_forward
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