4. Velocity and the quantity equation Consider a simple economy that produces only cell phones. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2017, the money supply was $400, the price of a cell phone was $5.00, and the economy produced 800 cell phones. Fill in the missing values in the following table, selecting the answers closest to the values you calculate. Price Level Quantity of Money Quantity of Output Nominal GDP (Dollars) (Cell phones) (Dollars) Velocity of Money (Dollars) Year 5.00 2017 400 800 2018 404 10 800 from 2017 to 2018. Since cell phone output did not change from 2017 to 2018 and the velocity of The money supply grew at a rate of , the change in the money supply was reflected in changes in the price level. The inflation rate from money 2017 to 2018 was
4. Velocity and the quantity equation Consider a simple economy that produces only cell phones. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2017, the money supply was $400, the price of a cell phone was $5.00, and the economy produced 800 cell phones. Fill in the missing values in the following table, selecting the answers closest to the values you calculate. Price Level Quantity of Money Quantity of Output Nominal GDP (Dollars) (Cell phones) (Dollars) Velocity of Money (Dollars) Year 5.00 2017 400 800 2018 404 10 800 from 2017 to 2018. Since cell phone output did not change from 2017 to 2018 and the velocity of The money supply grew at a rate of , the change in the money supply was reflected in changes in the price level. The inflation rate from money 2017 to 2018 was
Chapter1: Making Economics Decisions
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Transcribed Image Text:4. Velocity and the quantity equation
Consider a simple economy that produces only cell phones. The following table contains information on the economy's money supply, velocity of
money, price level, and output. For example, in 2017, the money supply was $400, the price of a cell phone was $5.00, and the economy produced
800 cell phones.
Fill in the missing values in the following table, selecting the answers closest to the values you calculate.
Price Level
Quantity of Money
Quantity of Output
Nominal GDP
(Dollars)
(Cell phones)
(Dollars)
Velocity of Money
(Dollars)
Year
5.00
2017
400
800
2018
404
10
800
from 2017 to 2018. Since cell phone output did not change from 2017 to 2018 and the velocity of
The money supply grew at a rate of
, the change in the money supply was reflected
in changes in the price level. The inflation rate from
money
2017 to 2018 was
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