When the growth rate of the money supply is decreased, interest rates wil rise immediately if the liquidity effect is ____ than the other money supply effects and there is ______ adjustment of expected inflation. larger; fast smaller; slow larger; slow smaller; fast

When the growth rate of the money supply is decreased, interest rates wil rise immediately if the liquidity effect is than the other money supply effects and there is __ adjustment of expected inflation. larger; fast smaller; slow larger; slow smaller; fast

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter24: The Influence Of Monetary And Fiscal Policy On Aggregate Demand

Section: Chapter Questions

Problem 3PA

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Suppose the money demand function is Md/P = 1000+ 0.2Y - 1000 (r + π²). and Y = 2000, r = .06, π = .04, and Ms is 2600. Suppose the real interest rate rises to 0.11, and expected inflation rises to 0.09, but Y and Ms are unchanged. What would the inflation rate be? Select one: a. 4% b. 10% O c. 6% d. 8%
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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%.
when the growth rate of the money supplt is decreased, interest rates will fall immediately if the liquidity effect is _____ than the other money supply effects and there is _____ adjustment of expected inflation. larger; fast smaller; fast larger; slow smaller; slow
If inflation is 5%, the real growth rate is 3%, and the change in velocity is 2%, then the increase in the money supply is _____
Assuming the growth rate in the velocity of money is 5$. If real GDP grows by 10% this year, and if the money supply does not change this year, how much does the price level change by? a) -5 b)-10 c) 5 d) 10
3. An economy has full-employment output of 1000. The other aggregates are as follows Cd = Id = 200+0.8(YT) - 500r 200-500r G = 196 T = 20+0.25Y Money demand is Md P = 0.5Y -250(r+π²) where expected rate of inflation л² = 0.10. The nominal supply of money M = 9890. 3.1 What are the general equilibrium values of the real interest rate, price level, consumption, and and investment?. 3.2 Suppose that government purchases are increased to G = 216. What are the new gen- eral equilibrium values of the real interest rate, the price level, consumption, and and investment?.
Holding output, Y, fixed, a reduction in the demand for money is the in velocity and will shift the aggregate equivalent of a(n) demand curve to the O increase; left O increase; right decrease; right decrease; left
Correct answer will be surely upvoted.Please answer fast i need it ASAP.
An economy has the following money demand function. 0.5 Y where the nominal interest rate is in percentage points. Nominal interest rate is 9 percent. (M/P) d = Suppose the announcement of a new head of the central bank, with a reputation of begin hard on inflation, decreases expected inflation rate by 8 percentage points. What is the new velocity of money? QUESTION 14 If, in the aftermath of the announcement, both the economy's output and the current money supply are unchanged, what happens to the price level? O 1.67 2.67 3.67 O 4.67
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