Velocity of money is constant, Macroeconomics

Suppose that this year's the money supply is $500 billion, nominal GDP is $10 trillion, and real GDP is $5trillion.
a. What is the price level?

b. What is the velocity of money?

c. Suppose that velocity of money is constant and the economy's output of goods and services (real GDP) rises by 5 percent each year. What will happen to nominal GDP and the price level if the Fed keeps the money supply constant?

Posted Date: 2/4/2014 1:53:32 AM | Location : United States







Related Discussions:- Velocity of money is constant, Assignment Help, Ask Question on Velocity of money is constant, Get Answer, Expert's Help, Velocity of money is constant Discussions

Write discussion on Velocity of money is constant
Your posts are moderated
Related Questions
Subsidy programs are likely to have a number of secondary effects in addition to the direct effect on dairy prices. What impact do you suppose farm subsidies are likely to have on

What are the main aspects of globalisation Two of the other main aspects of globalisation are greater international mobility of capital and to some extent of labour. Globalisa

what are the purposes of taxation

Despite the economic progress that the U.S. has observed in the past century, the standard of living remains extremely low in many countries. Why are some countries relatively weal

A financial manager wants to design an investment portfolio for a client. The client has $50,000 available to invest, and the planner has identified four investment options for the

Capitalism is the dominant, most used form of government there is in the globe today. Presently, over 80% of countries use capitalism and a free market economy.

Firms in the circular flow We divide all firms into 3 categories: F R comprises all firms which acquire raw material (farm products, iron ore and so on), F H all those that p

In January of 1997, the U.S. Consumer Price Index (CPI) stood at 159.1. By January of 2008, the level had risen to 211.1. What was the average annual rate of inflation over this ti

Treatment of Na2PdCI4 with 3-chloro-2-methyl-1-propene under an atmosphere of CO yields the dimer [(11 3 - C 4 H 7 )PdClb (A). The 1H NMR spectrum of A at 298 K shows 3 signals: a