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 2019, the money supply was $360, the price ofa pie was $4.50, and the economy produced 800 pies.Fill in the missing values in the following table, selecting the answers closest to the values you calculate.Quantity of MoneyQuantity of OutputNominal GDP(Dollars)Price LevelYearVelocity of Money(Dollars)360(Dollars)4.50(Pies)8002019202037810800the change in the money supply wasThe money supply grew at a rate ofreflectedfrom 2019 to 2020. Since pie output did not change from 2019 to 2020 and the velocity of moneyin changes in the price level. The inflation rate from 2019 to 2020 was

Solution - Given in the question - In 2019 - Quantity of money = $360 Price level = 4.50 Quantity…

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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An article in The Economist magazine noted that 'the economy's potential to supply goods and services [is] determined by such things as the labour force and capital stock, as well as inflation expectations'. Do you agree with this list of the determinants of potential GDP? Briefly explain.
Consider the following table from Source: 5220.0 Australian National Accounts: State Accounts, Table 7 - Tasmania, that gives nominal GSP (current prices) and real GSP (chain volume) for Tasmania. Tas GSP Tas GSP (Current (Chain Volume) 28931 Prices) Jun-2017 30019 Jun-2018 30263 30975 Jun-2019 31993 31993 Jun-2020 32904 32102 a. Calculate the implicit GSP price deflator. Feel free to use MS Excel. 6. Calculate the growth rate in Nominal GSP, Real GSP and the price deflator. c. What do you notice about the sum of the Real GSP and price deflator growth rates?
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Suppose you are hired as an Economic Consultant to analyze the economy of Blueland. Using information from Table 1, answer the following questions for your client. Table 1 Blueland's Real Gross Domestic Product $24.3 trillion Blueland's RGDP growth rate 2.6% Blueland's inflation rate 8.5% Blueland Central Bank's inflation target 2% Blueland's unemployment rate 3.5% Natural rate of unemployment 4.4% Blueland's population 330 million Based on the information in Table 1, how would you describe Blueland's Economy to your client? Explain to your client the economic challenges Blueland faces in the short run. Identify at least one specific fiscal policy you recommend that Blueland enact to bring the economy to its long-term equilibrium/potential GDP. Identify at least one specific monetary policy you recommend Blueland enact. As an economic consultant to the Blueland, explain the open market operation that will restore the economy to its long-term equilibrium/potential…

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