Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 28, Problem 43P
If
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If GDP is 1800 and the money supply is 450, what is the velocity of money? Show your work.
If nominal GDP in an economy is $1500 and the money supply is $500, what is the velocity of money?
a. 333
b. 5
c. 3
d. 7500
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3: If a country increases its money supply by 4%, and its nominal GDP increases by 6%, what can you say about what happened to the velocity of money in this country? (with graph explaining the answer)
a. it did not change
b. it decreased
c. we cannot tell which way it changed
d. it increased
e. none of the above
4:When the fed sells bonds (or bond options) on a large scale from private banks, ceteris paribus, (*with graph explaining the answer*)
a. the money supply tends to decrease
b. the money supply tends to not chance
c. aggregate demand tends to shift right
d. the money supply tends to increase
e. none of the above
Chapter 28 Solutions
Principles of Economics 2e
Ch. 28 - Why is it important for the members of the Board...Ch. 28 - Given the danger of bank runs, why do banks not...Ch. 28 - Bank runs are often described as self-fulfilling...Ch. 28 - If the central bank sells 500 in bonds to a bank...Ch. 28 - What would be the effect of increasing the banks...Ch. 28 - Why does contractionary monetary policy cause...Ch. 28 - Why does expansionary monetary policy causes...Ch. 28 - Why might banks want to hold excess reserves in...Ch. 28 - Why might the velocity of money change...Ch. 28 - How is a central bank different from a typical...
Ch. 28 - List the three traditional tools that a central...Ch. 28 - How is bank regulation linked to the conduct of...Ch. 28 - What is a bank run?Ch. 28 - In a program of deposit insurance as it is...Ch. 28 - In government programs of bank supervision, what...Ch. 28 - What is the lender of last resort?Ch. 28 - Name and briefly describe the responsibilities of...Ch. 28 - Explain how to use an open market operation to...Ch. 28 - Explain how to use the reserve requirement to...Ch. 28 - Explain how to use the discount rate to expand the...Ch. 28 - How do the expansionary and contractionary...Ch. 28 - How do tight and loose monetary policy affect...Ch. 28 - How do expansionary, tight, contractionary, and...Ch. 28 - Which kind of monetary policy would you expect in...Ch. 28 - Explain how to use quantitative easing to...Ch. 28 - Which kind of monetary policy would you expect in...Ch. 28 - How might each of the following factors complicate...Ch. 28 - Define the velocity of the moneyCh. 28 - What is the basic quantity equation of money?Ch. 28 - How does a monetary policy of inflation target...Ch. 28 - Why do presidents typically reappoint Chairs of...Ch. 28 - In what ways might monetary policy be superior to...Ch. 28 - The term moral hazard describes increases in risky...Ch. 28 - Explain what would happen if banks were notified...Ch. 28 - A well-known economic model called the Phillips...Ch. 28 - How does rule-based monetary policy differ from...Ch. 28 - Is it preferable for central banks to primarily...Ch. 28 - Suppose the Fed conducts an open market purchase...Ch. 28 - Suppose the Fed conducts an open market sale by...Ch. 28 - All other things being equal, by how much will...Ch. 28 - Suppose now that economists expect the velocity of...Ch. 28 - If GDP is 1,500 and the money supply is 400, what...Ch. 28 - If GDP now rises to 1,600, but the money supply...Ch. 28 - If GDP now falls back to 1,500 and the money...
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Similar questions
- If real GDP equals 7,000, nominal GDP equals 14,000, and the price level equals 2, then what is velocity if the money stock equals 3,500?arrow_forwardSuppose that the Price level = 115, Supply of Money = $60 billion, and Real GDP = $12 billion. What does the velocity of money equal? Select one: a. 30 b. 23 c. 20 d. 18 e. 15arrow_forwardFor a country A, the nominal GDP growth rate is 10 percent and inflation is 4 percent. If the velocity of money remains constant, what is the percent change in real money balances?arrow_forward
- Define velocity of money and discuss the major determinants of velocity.arrow_forwardFind the velocity of money when ?=$522M=$522, ?=105P=105, and ?R=$23YR=$23. M is the money supply, v is the velocity of money, P is the price level, and YR is the real gross domestic product (GDP). Round your answer to 2 decimal places.arrow_forwardReal GDP = 4000 units Price Level = $4.00 per unit Money Supply = 1500 How many times did money change hands? What is the Velocity of the money?arrow_forward
- If nominal GDP is 2000 and the money supply is 360, then velocity is [a] (round to two decimal places).arrow_forwardAll other things being equal, by how much will nominal GDP expand if the central bank Increases the money supply by 100 billion, and the velocity of money is 3? (Use this information as necessary to answer the following 4 questions.)arrow_forwardIf Money Supple is $14,500, real GDP is 30,500, and velocity of money is 2.3, then how much is the price level ?arrow_forward
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