Question 2 In countries with very high rates of inflation (hyperinflation), it is usually the case that O the growth rate of the money supply is greater than the inflation rate. Othe growth rate of the velocity of circulation is negative. O the growth rate of the money supply is less than the growth rate of the inflation rate. O the growth rate of the money supply is equal to the inflation rate.

Question 2 In countries with very high rates of inflation (hyperinflation), it is usually the case that O the growth rate of the money supply is greater than the inflation rate. Othe growth rate of the velocity of circulation is negative. O the growth rate of the money supply is less than the growth rate of the inflation rate. O the growth rate of the money supply is equal to the inflation rate.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Money Growth And Inflation

Section: Chapter Questions

Problem 4PA

See similar textbooks

Similar questions

Price stability: Suppose you are the head of the central bank and your mandateis to maintain the price level at a constant value. Explain what you would doto the money supply in response to each of the following events:(a) Real GDP increases by 4% during a boom.(b) Real GDP declines by 1% during a recession.(c) Real GDP is growing at 3% per year.(d) Te velocity of money increases by 2%.(e) Te velocity of money declines by 1%.
QUESTION 6 The nominal demand for money O A. Is increasing in the average price level in the economy O B. Is decreasing in the average price level in the economy O C. Does not depend on the average price level in the economy O D. Only depends on the average price level in the economy when inflation is high
According to the Quantity Theory of Money, if the velocity of money is constant, and if the money supply increases, while at the same time real GDP decreases, then, ceteris paribus, it follows that in the long run: Select one: O a. the price level will increase - i.e. the economy will experience inflation. O b. the price level will decrease - i.e. the economy will experience deflation. O c. nominal GDP must be decreasing. O d. none of the above is mathematically possible.
When the velocity of money is independent of the price level, the interest rate, the money supply and the level of real GDP. the quantity theory predicts that Select one: a.The growth rate of real GDP = Growth rate of money supply + Inflation rate O b. The inflation rate if positive when the growth rate of money supply = growth rate of real GDP c. The inflation rate is positive when the growth rate of the money supply is less than the growth rate of GDP d. growth rate of real GDP + inflation rate = Grow rate of money supply Oe The inflation rate is constant. Please I need it with explanation and fast
If money supply increases 10%, and we assume a constant money velocity: O We should have a price increase of 10% in the short-run, and an output increase of 10% in the long-run. O We don't have enough data to answer. O Price and output increase by 10% in the long-run. O Price and output increase by 5% in the long-run. O We should have an output increase of 10% in the short-run, and a price increase of 10% in the long-run.
2
Please answer fast
If we observe a small decrease in the actual overnight interest rate over a several-day period, we can definitely conclude that the O a. Bank of Canada has implemented a contractionary monetary policy. O b. It is not possible to conclude any of the above. O c. Bank of Canada has implemented an expansionary monetary policy. O d. Government of Canada has reduced the money supply. O e. Bank of Canada has abandoned its inflation target.
4the money supply in freedonia this year is $150 billion Nominal GDP is $750 billions and real GDP is $250 billion. assuming that velocity of money is stable real GDP grows by 2%this year and the money supply does not change. what are the velocity price level and inflation rate
Which of the following represents a short-run e_ect of a monetary contraction? Select one: O a. an increase in the interest rate O b. a reduction in the price level O c. all of the above O d. a reduction in output
A4
The United States Federal Reserve is currently the money supply with the intention of keeping short-term interest rates O A. increasing, high B. increasing, low O C. decreasing, low O D. decreasing, high Reset Selection