Suppose that this year's money supply is $500 billion, nominal GDP is $10 trillion, and real GDP is $5 trillion. The price level is 2, and the velocity of money is [ 20 Suppose that velocity is constant and the economy's output of goods and services rises by 4 percent each year. Use this information to answer the questions that follow. If the Fed keeps the money supply constant, the price level will fall by 4% and nominal GDP will stay the same True or False: If the Fed wants to keep the price level stable instead, it should increase the money supply by 4% next year. True False If the Fed wants an inflation rate of 11 percent instead, it should be rewritten as the following percentage change formula: the money supply by %. (Hint: The quantity equation can (Percentage Change in M) + (Percentage Change in V) = (Percentage Change in P) + (Percentage Change in Y).)

Suppose that this year's money supply is $500 billion, nominal GDP is $10 trillion, and real GDP is $5 trillion. The price level is 2, and the velocity of money is [ 20 Suppose that velocity is constant and the economy's output of goods and services rises by 4 percent each year. Use this information to answer the questions that follow. If the Fed keeps the money supply constant, the price level will fall by 4% and nominal GDP will stay the same True or False: If the Fed wants to keep the price level stable instead, it should increase the money supply by 4% next year. True False If the Fed wants an inflation rate of 11 percent instead, it should be rewritten as the following percentage change formula: the money supply by %. (Hint: The quantity equation can (Percentage Change in M) + (Percentage Change in V) = (Percentage Change in P) + (Percentage Change in Y).)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that this year's money supply is $600 billion, nominal GDP is $15 trillion, and real GDP is $3 trillion. The price level is , and the velocity of money is . Suppose that velocity is constant and the economy's output of goods and services rises by 4 percent each year. Use this information to answer the questions that follow. If the Fed keeps the money supply constant, the price level will , and nominal GDP will . True or False: If the Fed wants to keep the price level stable instead, it should keep the money supply unchanged next year. True False If the Fed wants an inflation rate of 9 percent instead, it should the money supply by . (Hint: The quantity equation can be rewritten as the following percentage change formula: (Percentage Change in M)+(Percentage Change in V)=(Percentage Change in P)+(Percentage Change in Y)Percentage Change in M+Percentage Change in V=Percentage Change in P+Percentage Change in Y.)
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Suppose that this year's money supply is $500 bilion, nominai GDP is $10 trillion, and real GDP is $5trillion. The price level is . and the velocity of money is Suppose that velocity is constant and the economy's output of goods and services rises by 4 percent each year. Use this information to answer the questions that follow. ar the Fed keeps the money supply constant, the price level will and nominal GDP will True or False: If the Fed wants to keep the price level stable instead, it should decrease the money supply by 4% next year. True False Ir the Fed wants an inflation rate of 10 percent instead, it should the money supply by (Hint: The quantity equation can be rewritten as the following percentage change formula: (Percentage Change in M) + (Percentage Change in V) = (Percentage Change in P) + (Percentage Change in .)
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