1. Problems and Applications Q1 Suppose that this year's money supply is $400 billion, nominal GDP is $12 triltion, and real GDP is $4 trillon. The price level is and the velocity of money is Suppose that velocity is constant and the economy's output of goods and services rises by 5 percent each year. Use this information to answer the Questions that follow If the Fed keeps the money supply constant, the price lev True or false: If the Fed wants to keep the price level stable instead, it should increase the money supply by 5% next year. True False d nominal GOP v the money supply by If the Fed wants an inflation rate of 8 percent instead, it should be rewritten as the following percentage change formula (Percentage Change in M) + (Percentage Change in V (Percentage Change in P) + (Percentage Change in 1)) (Hint: The quantity equation can
1. Problems and Applications Q1 Suppose that this year's money supply is $400 billion, nominal GDP is $12 triltion, and real GDP is $4 trillon. The price level is and the velocity of money is Suppose that velocity is constant and the economy's output of goods and services rises by 5 percent each year. Use this information to answer the Questions that follow If the Fed keeps the money supply constant, the price lev True or false: If the Fed wants to keep the price level stable instead, it should increase the money supply by 5% next year. True False d nominal GOP v the money supply by If the Fed wants an inflation rate of 8 percent instead, it should be rewritten as the following percentage change formula (Percentage Change in M) + (Percentage Change in V (Percentage Change in P) + (Percentage Change in 1)) (Hint: The quantity equation can
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter16: The Influence Of Monetary And Fiscal Policy On Aggregate Demand
Section: Chapter Questions
Problem 3PA
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