suppose the diffrence between the transaction velocity and the income velocity of circulation of money in an economy is a 5 and the money value of total transaction 6 times the money value of aggregate income . if the quantity of money in circulation is 1000 currency unit , then the money value of aggregate income in currency unit is (a)1000 (b)1200 (c)1500 (D)1800

suppose the diffrence between the transaction velocity and the income velocity of circulation of money in an economy is a 5 and the money value of total transaction 6 times the money value of aggregate income . if the quantity of money in circulation is 1000 currency unit , then the money value of aggregate income in currency unit is (a)1000 (b)1200 (c)1500 (D)1800

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 1.4CE

See similar textbooks

Related questions

Q: Based on the following data (in billions of dollars), calculate GDP Disposable income Consumption…

A: GDP is the gross domestic product. GDP is the money value of all the goods and services produced in…

Q: Monetary Approach with a constant velocity Money supply growth has steady been 2% higher in Japan…

A: In the international market, the level of inflation among the nations explain the value of the…

Q: Suppose that an economy has a constant nominal money supply, a constant level of real output Y =…

A: In the question above, it is given that : An economy has a constant nominal money supply. A…

Q: Explain how the GDP and the interest rate are related to the transactions and asset demands for…

A: Demand for money: It means the total amount of money that is wanted to be held by the population of…

Q: Suppose the growth rate of nominal GDP is 10% per year and the growth rate of real GDP is 2%…

A: According to the quantity theory of money, the money growth rate is calculated by multiple money…

Q: True False Partnership structures are commonly used for the following type of businesses other than:…

A: Hey, Thank you for the question. According to our policy we can only answer 1 question per session.…

Q: Assume that a country’s nominal GDP was measured at $1500 billion in a year and the volume of money…

A: Answer to the question is given by :

Q: In the quantity equation, MV = PY, if velocity is constant, real GDP is growing at 2% per year, and…

A: The quantity theory of money:- MV = PY M = money supply V = velocity P = inflation Y = real GDP

Q: Considering everything that's occurred because of COVID-19, would we be considered to be in a…

A: When we say about recession then we means that low GDP, Higher unemployment , decline in industrial…

Q: The following table represents the thallium production and apparent consumption in the United States…

A: The rate of inflation can be calculated as follows: Rate of inflation=Future valuePresent…

Q: Japan's central bank, the Bank of Japan, has an inflation target of -0.25% per year (or rather…

A: Inflation refers to the situation of increasing price level in the economy. Deflation refers to the…

Q: If the money supply (M) is $300, the real GDP (Q) is 200, the velocity of money (V) is 6, the…

A: Real GDP is the value of output produced in the economy by taking inflation into account. The money…

Q: 18, U.S. output was $20.5 trillion, and Chinese output in 2017was $13 5 trillion. Suppose that fro…

A: All calculations given below, Equilibrium level were demand is equivalent to supply.

Q: Money demand equation for a country is given by the equation (MP)d=e−λ(πe+r)+αY where πe is expected…

A: The money demand curve shows the inverse relationship between money demand and interest rate. It…

Q: Which one of the following statements regarding the demand for money is correct? (a) A positive…

A: c)For a given interest rate, an increase in nominal income increases the demand for money; If the…

Q: Suppose the central bank in the nation of Zook attempts to pay off its national debt by printing…

A: When the price level rises in an economy, the quantity of goods and services that money can buy…

Q: The velocity of money A) is calculated as P/M. B) indicates the number of times per year a…

A: The money velocity is an estimation of the rate at which money is exchanged within an economy. It…

Q: Suppose the money supply M has been growing at 19% per year and nominal GDP, PY, has been growing at…

A: Velocity of money: The velocity of money (V) tells us how quickly money circulates within an…

Q: Assume the following: (1) the interest rate on six-month treasury bills is 8 percent per annum in…

A: The theory of interest rate parity holds that differences in exchange rates between two countries…

Q: he velocity of money represents: (a) Whether individuals are increasing or decreasing the…

A: The concept of velocity of money and equation of exchanged was proposed by Irving Fisher

Question

(a)1000

(b)1200

(D)1800

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Suppose the Australian money supply (M) grows at 4% in 2021, real GDP (Y) grows at 2%, the real interest rate (r) is -1%, and the money demand function is as follows. (M/P)d = 0.7Y Based on the above information, answer the following questions. (a) Calculate the nominal interest rate (i), assuming the quantity theory of money holds. (b) Suppose the Reserve Bank of Australia (RBA) announces it will tighten its monetary policy in 2022, resulting in the Australian public expecting inflation to change to 1%. Assuming the nominal interest rate is unchanged at the 2021 level, what is the ex-ante real interest rate in 2022? (c) Assume the Fisher effect holds, and the real interest rate remains constant at the 2021 level. If expected inflation for 2023 is 2%, what will the nominal exchange rate be in 2023? Motivate your answer.
(M/P)d = 1,000 − 100r,M = 1000P = 2.a) Graph the supply and demand for real money balances.b) What is the equilibrium interest rate?c) Assume that the price level is fixed. What happens to the equilibrium interest rate if the supply ofmoney is raised from 1,000 to 1,200?d) If the Central Bank wishes to raise the interest rate to 7 percent, what money supply should it set?
If the central bank wants to achieve a long-run target inflation rate of p, at what rate should the money supply grow?
Owing to increasing, food and transport prices, the Consumer Price Index (CPI) in South Africa accelerated from 6,5% to 7,4% in June 2022. As a result, the monetary policy committee (MPC) decided to increase the repurchase rate by 75 basis points to 5,50% per year, with effect from 22 July 2022. with the aid of a diagram, explain how the money market in South Africa will be affected by the MPC's decision to increase the interest rate. The direction of any changes should be clearly indicated by using arrows.
Economy
Assume that all full-bodied coins are issued by the federal government and that the following three steps are involved: (1) It defines the gold value of the monetary unit by stipulating that the dollar contains 24.0 grains of pure gold. Also, assume that there are 480 grains of gold in one ounce of gold. (2) At the stipulated price, it will purchase all the metal that is offered and coin it without limit and virtually without charge. (3) It will permit the melting of coins to get gold for nonmonetary uses. Below are the Demand and Supply schedules for gold as a commodity for non-monetary purposes: 厂T Quantity Demanded (ozs.) Price $25.00 Quantity Supplied (ozs.) 500 400 100 200 20.00 300 300 400 500 15.00 200 100 10.00 5.00 You may use this blank graph to help you answer all questions below: Price Quantity
Japan's central bank, the Bank of Japan, has an inflation target of -0.25% per year (or rather "Deflation Target"). According to the Quantity Theory of Money, by how much must the Bank of Japan grow the money stock in order to hit its inflation target? A) The Bank of Japan must increase the money stock by 0.25% per year. B) The Bank of Japan must decrease the money stock by 0.25% per year. C) The Bank of Japan must increase the money stock by 0.25% per month. D) The Bank of Japan must decrease the money stock by 0.25% per month.
refer to the photo
Q3 B) (b) Discuss THREE (3) main determinants of money supply in Malaysia Answer should be written with proper examples and elabotations. Thank you.
The velocity of money A) is calculated as P/M. B) indicates the number of times per year a currency unit is used as a medium of exchange. C)indicates the speed with which the Canadian Treasury can mint new currency. D) is equal to 2k in the Cambridge equation.
Which one of the following statements regarding the demand for money is correct? (a) A positive relationship exists between the quantity of money demanded and the prevailing interest rate in an economy; (b) The demand for money is made up of the sum of all the money balances that participants in the economy would like to have; (c) For a given interest rate, an increase in nominal income increases the demand for money; (d) Two key factors that impact on the demand for money by individuals are savings and investments available to participants.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.