Consider a simple economy that produces only pies. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2016, the money supply was 100, the price of a pie was $5.00, and the economy produced 200 pies.Fill in the missing values in the following table, rounding to the nearest cent when necessary.YearMoney SupplyVelocity of MoneyPrice LevelQuantity of OutputNominal GDP(Dollars)(Dollars)(Pies)(Dollars)2016100 5.00200 201710510 200 The money supply grew at a rate of______% from 2016 to 2017. Since pie output did not change from 2016 to 2017 and the velocity of money _______ , the change in the money supply was reflected _________ in changes in the price level. The inflation rate from 2016 to 2017 was _____%.

The quantity of pie sold in the economy in the year 2016 is equal to 200. Since the GDP is the sum…

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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 pies. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2016, the money supply was 100, the price of a pie was $5.00, and the economy produced 200 pies.

Fill in the missing values in the following table, rounding to the nearest cent when necessary.

Year	Money Supply	Velocity of Money	Price Level	Quantity of Output
(Dollars)	(Dollars)	(Pies)	(Dollars)
2016	100		5.00	200
2017	105	10		200

The money supply grew at a rate of______% from 2016 to 2017. Since pie output did not change from 2016 to 2017 and the velocity of money _______ , the change in the money supply was reflected _________ in changes in the price level. The inflation rate from 2016 to 2017 was _____%.

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