0 0 $6 trillion What is the GDP of this economy? 2 $36 trillion o $54 trillion O $72 trillion 4 6 8 REAL GDP (Trillions of dollars) o $6 trillion $3 trillion 10 If the velocity of money is 3, the money supply in this economy is $18 trillion 12 Adjust the previous graph to show the effects of a decrease in the money supply. Based on the new price level, what must the new money supply be in the long run if the velocity of money remains at 3?
0 0 $6 trillion What is the GDP of this economy? 2 $36 trillion o $54 trillion O $72 trillion 4 6 8 REAL GDP (Trillions of dollars) o $6 trillion $3 trillion 10 If the velocity of money is 3, the money supply in this economy is $18 trillion 12 Adjust the previous graph to show the effects of a decrease in the money supply. Based on the new price level, what must the new money supply be in the long run if the velocity of money remains at 3?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Not sure if my answers are correct and confused on the last question
![0
0
O $6 trillion
What is the GDP of this economy?
$36 trillion
2
o $54 trillion
O $72 trillion
o $6 trillion
O$3 trillion
4
6
8
REAL GDP (Trillions of dollars)
O $15 trillion
If the velocity of money is 3, the money supply in this economy is $18 trillion
O $12 trillion
Adjust the previous graph to show the effects of a decrease in the money supply.
Based on the new price level, what must the new money supply be in the long run if the velocity of money remains at 3?
10
12
Because
money supply. This illustrates the
, the percentage decrease in the price level is
the percentage decrease in the](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F24f7744d-25f2-450f-8552-aa2e46092ac4%2F8df29e76-ef1e-4676-a848-c45df05cdf6c%2Fdmjl1vju_processed.jpeg&w=3840&q=75)
Transcribed Image Text:0
0
O $6 trillion
What is the GDP of this economy?
$36 trillion
2
o $54 trillion
O $72 trillion
o $6 trillion
O$3 trillion
4
6
8
REAL GDP (Trillions of dollars)
O $15 trillion
If the velocity of money is 3, the money supply in this economy is $18 trillion
O $12 trillion
Adjust the previous graph to show the effects of a decrease in the money supply.
Based on the new price level, what must the new money supply be in the long run if the velocity of money remains at 3?
10
12
Because
money supply. This illustrates the
, the percentage decrease in the price level is
the percentage decrease in the
![The equation of exchange is given by MXV = PX Q, where M is the money supply, V is the velocity of money, P is the economy's price level, and
Qis Real GDP.
Suppose the following diagram shows the current aggregate demand (AD) and aggregate supply (AS) curves in a hypothetical economy.
PRICE LEVEL
CO
15
3
0
0
2
AS
What is the GDP of this economy?
AD₂
4
6
8
REAL GDP (Trillions of dollars)
AD₁
10
12
O****
AD
101
AS
(?)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F24f7744d-25f2-450f-8552-aa2e46092ac4%2F8df29e76-ef1e-4676-a848-c45df05cdf6c%2Fixko0w3_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The equation of exchange is given by MXV = PX Q, where M is the money supply, V is the velocity of money, P is the economy's price level, and
Qis Real GDP.
Suppose the following diagram shows the current aggregate demand (AD) and aggregate supply (AS) curves in a hypothetical economy.
PRICE LEVEL
CO
15
3
0
0
2
AS
What is the GDP of this economy?
AD₂
4
6
8
REAL GDP (Trillions of dollars)
AD₁
10
12
O****
AD
101
AS
(?)
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