Consider a simple economy that produces only air fryers. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2021, the money supply was $400, the price of a air fryer was $10.00, and the economy produced 800 air fryers. Fill in the missing values in the following table, selecting the answers closest to the values you calculate.YearQuantity of MoneyVelocity of MoneyPrice LevelQuantity of OutputNominal GDP(Dollars)(Dollars)(Air fryers)(Dollars)2021400 10.00800 202242020 800 The money supply grew at a rate of ? from 2021 to 2022. Since air fryer output did not change from 2021 to 2022 and the velocity of money increased, decreased, or remained the same? , the change in the money supply was reflected (partially or entirely?) in changes in the price level. The inflation rate from 2021 to 2022 was ? .

Equation for the quantity theory of money is: MV = PY

Answered: Consider a simple economy that produces…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider a simple economy that produces only air fryers. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2021, the money supply was $400, the price of a air fryer was $10.00, and the economy produced 800 air fryers.

Fill in the missing values in the following table, selecting the answers closest to the values you calculate.

Year	Quantity of Money	Velocity of Money	Price Level	Quantity of Output
(Dollars)	(Dollars)	(Air fryers)	(Dollars)
2021	400		10.00	800
2022	420	20		800

The money supply grew at a rate of ? from 2021 to 2022. Since air fryer output did not change from 2021 to 2022 and the velocity of money increased, decreased, or remained the same? , the change in the money supply was reflected (partially or entirely?) in changes in the price level. The inflation rate from 2021 to 2022 was ? .

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