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 $240, the price of a pie was $7.20, and the economy produced 500 pies. 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)(Pies)(Dollars)2019240 7.205003,600.00 2020252157.56 5003,780.00 The money supply grew at a rate of5% from 2019 to 2020. Since pie output did not change from 2019 to 2020 and the velocity of money , the change in the money supply was reflected in changes in the price level. The inflation rate from 2019 to 2020 was .

The quantity of pie sold in the economy in the year 2019 is equal to 500. 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 2019, the money supply was $240, the price of a pie was $7.20, and the economy produced 500 pies.

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	Nominal GDP
(Dollars)	(Dollars)	(Pies)	(Dollars)
2019	240		7.20	500	3,600.00
2020	252	15	7.56	500	3,780.00

The money supply grew at a rate of5% from 2019 to 2020. Since pie output did not change from 2019 to 2020 and the velocity of money , the change in the money supply was reflected in changes in the price level. The inflation rate from 2019 to 2020 was .

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