Fill in the table, and use it to answer the following questions. 2015 2016 Quantity of Money €300 €336 Velocity of Money 20 Price Level €7.50 € Quantity of Output 800 800 In 2015, nominal GDP was € whereas in 2016, nominal GDP was € The money supply grew at a rate of % from 2015 to 2016. Since the velocity of money , the change in the money supply caused nominal GDP to grow by %. Moreover, since apple output did not change from 2015 to 2016, the change in money supply was reflected in changes in the price level. The inflation rate from 2015 to 2016 was %. Which of the following caused the inflation between 2015 and 2016? An increase in the money supply O An increase in real GDP O A decrease in the velocity of money
Fill in the table, and use it to answer the following questions. 2015 2016 Quantity of Money €300 €336 Velocity of Money 20 Price Level €7.50 € Quantity of Output 800 800 In 2015, nominal GDP was € whereas in 2016, nominal GDP was € The money supply grew at a rate of % from 2015 to 2016. Since the velocity of money , the change in the money supply caused nominal GDP to grow by %. Moreover, since apple output did not change from 2015 to 2016, the change in money supply was reflected in changes in the price level. The inflation rate from 2015 to 2016 was %. Which of the following caused the inflation between 2015 and 2016? An increase in the money supply O An increase in real GDP O A decrease in the velocity of money
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Fill in the table, and use it to answer the following questions.
2015
2016
Quantity of Money
€300
€336
Velocity of Money
20
Price Level
€7.50
€
Quantity of Output
800
800
In 2015, nominal GDP was €
whereas in 2016, nominal GDP was €
The money supply grew at a rate of
% from 2015 to 2016. Since the velocity of money
the change in the money
supply caused nominal GDP to grow by
%. Moreover, since apple output did not change from 2015 to 2016, the change in money supply was
reflected
in changes in the price level. The inflation rate from 2015 to 2016 was
%.
Which of the following caused the inflation between 2015 and 2016?
An increase in the money supply
An increase in real GDP
A decrease in the velocity of money
Assume the money demand function for this economy is a function of income (Y) and a constant (k) in the following way:
Demand for Money
kY
In 2015, real money balances were
. This implies that people want to hold
of every euro of income in the form of money.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb1b6fd35-affc-4c43-8294-bc26e9900081%2Fb06d305f-080b-4fac-a845-6edced831af0%2Ff8ggp2c_processed.png&w=3840&q=75)
Transcribed Image Text:Fill in the table, and use it to answer the following questions.
2015
2016
Quantity of Money
€300
€336
Velocity of Money
20
Price Level
€7.50
€
Quantity of Output
800
800
In 2015, nominal GDP was €
whereas in 2016, nominal GDP was €
The money supply grew at a rate of
% from 2015 to 2016. Since the velocity of money
the change in the money
supply caused nominal GDP to grow by
%. Moreover, since apple output did not change from 2015 to 2016, the change in money supply was
reflected
in changes in the price level. The inflation rate from 2015 to 2016 was
%.
Which of the following caused the inflation between 2015 and 2016?
An increase in the money supply
An increase in real GDP
A decrease in the velocity of money
Assume the money demand function for this economy is a function of income (Y) and a constant (k) in the following way:
Demand for Money
kY
In 2015, real money balances were
. This implies that people want to hold
of every euro of income in the form of money.
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