[The following scenario applies to the next two questions.] In 20X2, real GDP = 783, the price level = 114, and the nominal wage rate= 35.48 / hour In 20X3, real GDP = 816, the price level = 161, and the nominal wage rate= 42.39 / hour The real interest rate, inflation rate, and bank transaction costs do not change, and the real demand for money is proportional to real GDP. Question 1.8: Nominal money supply What is the percentage change in the nominal money supply from 20X2 to 20X3? A. 42.93% B. 44.35% C. 45.76% D. 47.18% E. 48.60% Question 1.9: Marginal product of labor What is the percentage change in the marginal product of labor from 20X2 to 20X3? A. -15.40% B. -15.86% C. -16.33% D. -16.79% E. -17.25%

[The following scenario applies to the next two questions.] In 20X2, real GDP = 783, the price level = 114, and the nominal wage rate= 35.48 / hour In 20X3, real GDP = 816, the price level = 161, and the nominal wage rate= 42.39 / hour The real interest rate, inflation rate, and bank transaction costs do not change, and the real demand for money is proportional to real GDP. Question 1.8: Nominal money supply What is the percentage change in the nominal money supply from 20X2 to 20X3? A. 42.93% B. 44.35% C. 45.76% D. 47.18% E. 48.60% Question 1.9: Marginal product of labor What is the percentage change in the marginal product of labor from 20X2 to 20X3? A. -15.40% B. -15.86% C. -16.33% D. -16.79% E. -17.25%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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These are true or false. Need help with both please. The basic quantity equation of money is MV = PQ, where M is the money supply, V is the velocity of money, P is the price level, and Q is the real output of the economy. (I got false on this one, but I have a feeling that the answer should be true). The data show that the velocity of M1 is unchanging, which is one reason for why there is very little uncertainty as to the effects of monetary policy. (I got true on this one, but I am not 100% sure).
According to the quantity theory of money, if the supply of money and the velocity of money are held constant, the price level can only increase if output (Click to select) ♥ (Click to select) stays constant increases decreases
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Give typing answer with explanation and conclusion A standard "money demand" function used by macroeconomists has the form ln(m)=β0+β1ln(GDP)+β2R, Where m is the quantity of (real) money, GDP is the value of (real) gross domesticproduct, and R is the value of the nominal interest rate measured in percent per year. Supposed that β1 = 2.66 and β2 = −0.05. A) What is the expected change in m if GDP increases by 4%? The value of m is expected to_________(increase or decrease ) by approximately ________% (Round your response to the nearest integer) B) What is projected to change in m if the interest rate increases form 2% to 6% ? The value of m is expected to ________(increase/decrease) by approximately ________% (Round your response to the nearest integer)
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Answer to 2 decimal digits
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An increase in nominal GDP will Multiple Choice increase the transactions demand and the total demand for money. decrease the transactions demand and the total demand for money. increase the transactions demand for money but decrease the total demand for money. decrease the transactions demand for money but increase the total demand for money.
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