What is the price level and what is the velocity of money

Assignment Help Econometrics
Reference no: EM13238667

Suppose that this year's money supply is $500 billion, nominal GDP is 10 trillion and real GDP is $5 trillion.

a) What is the price level? what is the velocity of money?

b) Suppose that velocity is constant and the economy's output of good and services rised by 5% each year, what will happen to nominal GPD and the price level next year if the Fed keeps the money supply constant?

c) what money supply should the Fed set next year if it wants to keep the price level constant?

d)What money supply should the fed set next year if it wants inflation of 10%?

Reference no: EM13238667

Questions Cloud

Explain what is the equivalent weight of the unknown acid : You obtain an unknown acid. You weigh out .856 grams of it and dissolve it in 45mL of water. You titrate it with 27.4mL of .5 M NaOH. What is the equivalent weight of the unknown acid
What is the unknown capacitance : A(n) 150 pF capacitor is connected in series with an unknown capacitor, and as a series combination they are connected to a 23.0 V battery, what is the unknown capacitance
Define what is the minimum work required in methane : methane flowing at 2 mol/min is adiabatically compressed from 300 K and 1 bar to 10 bar. What is the minimum work required? Use Departure Functions.
What was the force due to the wind : A 500- kg ice boat moves on runners on essentially frictionless ice. A steady wind blows, What was the force due to the wind
What is the price level and what is the velocity of money : Suppose that velocity is constant and the economy's output of good and services rised by 5% each year, what will happen to nominal GPD and the price level next year if the Fed keeps the money supply constant
Explain what is the minimum work required : methane flowing at 2 mol/min is adiabatically compressed from 300 K and 1 bar to 10 bar. What is the minimum work required? Use Departure Functions.
Find what is the deadweight loss generated : Consider a monopolist facing a demand curve given by P = 20 - q, where P is the market price and q is the quantity sold. The monopolist's marginal costs are MC = 2 per unit; there are no other costs. What is the deadweight loss generated
Explain the structure of the compound and assign all the ns : the 1H NMR spectrum contains a triplet at 1.08 ppm (3H), a singlet at 2.5 ppm (3H), and a quartet at 2.45 ppm (2h). the magnitudes of the splitting of both the quartet and triplet are identical. deduce the structure of this compound and assign all..
How does total output depend on the total amount of labor : Suppose that the production of crayons (q) is conducted at two locations and uses only labor as an input.The production function in location 1 by Q1=10Lx^0.5 and in location 2 by Q2=50Ly^0.5

Reviews

Write a Review

Econometrics Questions & Answers

  How much can be withdrawn each month from the account

You are planning to save for retirement over the next 30 years. To do this, you will invest $ 700 a month in a stock account and $ 300 a month in a bond account. The return of the stock account is expected to be 11 percent, and the bond account wi..

  Split the profits with an 80-20 split

Elaine as senior partner can make a take-it-or-leave it offer to her junior partner John to undertake a project and split the profits of $10,000. She considers just two offers: an 80-20 split (favoring Elaine), or a 50-50 split.

  How much will evelyn save in interest choosing one loan

Evelyn has been shopping for a home entertainment system. Being a graduate of Dr. Corman's Personal Finance class, she has determined that she can afford $200 in monthly payments over 2 years. If she can get an 8% annual rate of interest

  At what output level will marginal costs reach a minimum

Sales have grown over this period with relatively few shocks due to uncontrollable weather, political and sporting events. This online retailer carries no inventories; when it receives a pre-paid on-line order from a customer.

  Compute the internal rate of return and net present value

A firm has the opportunity to invest in a project having an initial outlay of $20,000. Net cash inflows (before depreciation and taxes) are expected to be $5,000 per year for five years. The firm has a marginal income-tax rate of 40%.

  Determine the concentration ratio in the industry

There are six companies in the industry. Assume their sales in the year 2006 are as follows, Determine the concentration ratio in the industry

  What does imply for the elasticity of demand for cigarette

Because of a legal settlement over state health care claims, in 1999 the U.S. tobacco companies had to raise the average price of a pack of cigarettes from $1.95 to $2.45. The decline in cigarette sales was estimated at 8 percent.

  How many car-rental days must jims have a month to breakeven

Jim's Car Rental has fixed costs of $220,000 per month and variable costs per car rented per day of $3. If Jim's charges $25 per day to rent a car, how many car-rental days (the number of cars rented times the number of days each is rented) must J..

  Determine the economic service life and corresponding aw

A new gear grinding machine for composite materials has a first cost of P=$100,000 and can be used for a maximum of 3 years. Its salvage value is estimated by the relation S=P(0.85)n, where n is the number of years after purchase. The operating cost ..

  How to calculate the cost to the state of paying out price

Suppose you are hired by your state government to determine the profitability of a lottery offering a grand prize of $10 million paid out in equal annual installments over 20 years. Show how to calculate the cost to the state of paying out such pr..

  What is the slope of linear regression

If the t ratio for the slope of a simple linear regression equation is equal to 1.614 and the critical values of the t distribution at the 1% and 5% levels of significance, respectively are 3.499 and 2.365, then what is the slope

  Find the optimal-utility-maximizing choice of food

julie has preferences for food, f, and clothing, c described by a utility function u(f,c)+f*c. her marginal utilities are Muf=c and Muc=f. suppose that food cost $1 a unit and that clothing costs $2 a unit. julie has $12 to spend on food and cloth..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd