the effect on the nominal GDP when the money supply increases by 5% and velocity remains unchanged. Concept Introduction: As per the equation of exchange, M×V=P×Y , where M is the quantity of money, V is its velocity , Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V = P × Y M .

Question

epidemiology. 2 to 3 setences max for each question

Answer 1

Question

Chapter 15, Problem 3.7P

Sub-part

A

To determine

the effect on the nominal GDP when the money supply increases by 5% and velocity remains unchanged.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Sub-Part

B

To determine

the effect on the nominal GDP when the money supply decreases by 8% and velocity remains unchanged.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Sub-Part

C

To determine

the effect on the nominal GDP when the money supply increases by 5% and velocity decreases by 5%.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Sub-Part

D

To determine

the effect on the price level in the short run in each of the situations.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

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epidemiology. 2 to 3 setences max for each question

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A firm operates with the production function Q = K2 L. Q is the number of units of output per day when the firm rents K units of capital and employs L workers each day. The manager has been given a production target: to produce 8,000 units per day. She knows that the daily rental price of capital is $400 per unit and the wage rate is $200 day. a. What is the returns to scale of this production function? Show mathematically. b. Currently the firm employs 80 workers per day. What is the firm’s daily total cost if it rents just enough capital to produce at its target? c. Compare the marginal product per dollar spent on K and on L when the firm operates at the input choice in part (b). What does this suggest about the way the firm might change its choice of K and L if it wants to reduce the total cost in meeting its target? Explain your answer very clearly. d. In the long run, how much K and L should the firm choose if it wants to minimize the cost of producing 8,000 units of output a day?…

Answer 2

Question

Chapter 15, Problem 3.7P

Sub-part

A

To determine

the effect on the nominal GDP when the money supply increases by 5% and velocity remains unchanged.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Sub-Part

B

To determine

the effect on the nominal GDP when the money supply decreases by 8% and velocity remains unchanged.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Sub-Part

C

To determine

the effect on the nominal GDP when the money supply increases by 5% and velocity decreases by 5%.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Sub-Part

D

To determine

the effect on the price level in the short run in each of the situations.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

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Answer 3

Question

Chapter 15, Problem 3.7P

Sub-part

A

To determine

the effect on the nominal GDP when the money supply increases by 5% and velocity remains unchanged.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Sub-Part

B

To determine

the effect on the nominal GDP when the money supply decreases by 8% and velocity remains unchanged.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Sub-Part

C

To determine

the effect on the nominal GDP when the money supply increases by 5% and velocity decreases by 5%.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Sub-Part

D

To determine

the effect on the price level in the short run in each of the situations.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

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Answer 4

Question

Chapter 15, Problem 3.7P

Sub-part

A

To determine

the effect on the nominal GDP when the money supply increases by 5% and velocity remains unchanged.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Sub-Part

B

To determine

the effect on the nominal GDP when the money supply decreases by 8% and velocity remains unchanged.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Sub-Part

C

To determine

the effect on the nominal GDP when the money supply increases by 5% and velocity decreases by 5%.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Sub-Part

D

To determine

the effect on the price level in the short run in each of the situations.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

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Answer 5

Chapter 15, Problem 3.7P

Sub-part

A

To determine

the effect on the nominal GDP when the money supply increases by 5% and velocity remains unchanged.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Sub-Part

B

To determine

the effect on the nominal GDP when the money supply decreases by 8% and velocity remains unchanged.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Sub-Part

C

To determine

the effect on the nominal GDP when the money supply increases by 5% and velocity decreases by 5%.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Sub-Part

D

To determine

the effect on the price level in the short run in each of the situations.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Answer 6

Chapter 15, Problem 3.7P

Sub-part

A

To determine

the effect on the nominal GDP when the money supply increases by 5% and velocity remains unchanged.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Answer 7

Chapter 15, Problem 3.7P

Sub-part

A

To determine

the effect on the nominal GDP when the money supply increases by 5% and velocity remains unchanged.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Answer 8

Sub-Part

B

To determine

the effect on the nominal GDP when the money supply decreases by 8% and velocity remains unchanged.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Answer 9

Sub-Part

B

To determine

the effect on the nominal GDP when the money supply decreases by 8% and velocity remains unchanged.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Answer 10

Sub-Part

C

To determine

the effect on the nominal GDP when the money supply increases by 5% and velocity decreases by 5%.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Answer 11

Sub-Part

C

To determine

the effect on the nominal GDP when the money supply increases by 5% and velocity decreases by 5%.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Answer 12

Sub-Part

D

To determine

the effect on the price level in the short run in each of the situations.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Answer 13

Sub-Part

D

To determine

the effect on the price level in the short run in each of the situations.

Concept Introduction: As per the equation of exchange, M×V=P×Y, where M is the quantity of money, V is its velocity, Y is nominal GDP, and P is the price level. This equation explains that total spending is equal to total receipts. Thus, an increase in the quantity of money in the economy will lead to an increase in the price level, assuming the velocity and output level remains constant. Also, if there is an increase in the output level, it can lead to increase in demand for M, however, if the M remains constant, it will affect the velocity of money. The equation also states that the quantity of money spent equals the quantity of money used. The quantity theory of money explains the link in the variables. V=P×YM .

Answer 14

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Answer 25

Ch. 15 - Prob. 1.1P Ch. 15 - Prob. 1.2P Ch. 15 - Prob. 2.3P Ch. 15 - Prob. 2.4P Ch. 15 - Prob. 2.5P Ch. 15 - Prob. 3.6P Ch. 15 - Prob. 3.7P Ch. 15 - Prob. 4.8P Ch. 15 - Prob. 4.9P Ch. 15 - Prob. 4.10P

Solution Summary: The author explains the quantity theory of money or the equation of exchange developed by the economist Fisher assumes that the velocity is constant.

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Chapter 15 Solutions