User Account

All Pages

What will happen to the inflation rate if the rate of growth

Assignment Help Macroeconomics
Reference no: EM13321709

The average annual growth rate of real GDP for the United States is about 3%. Assume that the growth rate of velocity is 0%, and the rate of growth of the money supply is 4%.

a. What is the current rate of inflation?

b. What will happen to the inflation rate if the rate of growth of the money supply increases to 7%?

c. What will happen to the inflation rate if the rate of growth of the money supply increases to 7%, and, at the same time, the growth rate of velocity increases to 2%?

Reference no: EM13321709

Questions Cloud

Why is the dollar not a hard asset : A New York Times column in the fall of 2009 reported that the value of the dollar was falling, in part, because “investors who had sought shelter in the American currency’s perceived stability
How does the money multiplier change when the nonbank public : How does the money multiplier change when the nonbank public decides to hold more currency relative to deposits?
Why is the value of the money multiplier typically greater : In April 2011, the money supply, as measured by M1, was approximately $1,917 billion. The monetary base was approximately $2,494 billion.
What is the difference between the quantity equation and the : State the quantity equation.What is the velocity of money?What is the difference between
What will happen to the inflation rate if the rate of growth : What will happen to the inflation rate if the rate of growth of the money supply increases to 7%, and, at the same time, the growth rate of velocity increases to 2%?
What was the velocity of money measured using m1 : In 2010, the money supply, M1, was $1,832 billion.Nominal GDP was $14,660 billion. What was the velocity of money measured using M1?
Find the marginal product of labor : Suppose that the production function were . Assume that A = 100,000, and that the current level of the capital stock is 10,000.
What is the marginal product of labor : Suppose that the production function is Y = A K1/4L3/4.What is the marginal product of labor (MPL)?
Why does it have the shape that you have drawn : Draw a graph of the aggregate production function with capital, K, on the horizontal axis. Why does it have the shape that you have drawn?

Reviews

Write a Review

Macroeconomics Questions & Answers

  What do you think branded products usually are

What do you think branded products usually are of higher quality than generic products and therefore justify their higher prices.

  Trade off between equity and growth

For a developing country to increase, it needs capital. The major source of capital in most nations is domestic saving, but the target of stimulating domestic saving usually is in conflict with the government policies targeted at decreasing inequalit..

  Assume the station plans to give the dvds away

Assume the station plans to give the DVDs away. How many should it order. From which supplier.

  Determine the bond price

Assume a $1,000 par-value bond was issued last year with a promised yearly rate of return (yield) of 6% when market interest rates on comparable securities were also 6%.

  Would hospitals customers be likely to benefit from merger

Does either hospital have a dominant strategy (or any dominated strategy) Assuming they determine their strategies independently or one another, what are the hospitals' respective (Nash) equilibrium strategies Explain briefly.

  If the price per visit is given to be $25, at what level of

If the price per visit is given to be $25, at what level of visits will the maximum profit position be?What are the profits at this level?

  Determine how many doses of the drug to produce

The company has already spent $150,000 on research and development for the drug. The first round of clinical trials has been performed cost $75,000 and the results from the trials were promising. The company is considering whether to proceed with ..

  Difference between the keynesian and monetarist views

Explain the difference between the Keynesian and monetarist views on how an increase in the money supply causes inflation and why is the shape of the aggregate supply curve important to the Keynesian-monetarist controversy?

  Use of the proportion of tax prep fees

the average tax charge is $95. Assuming a normal distribution as a standard deviation of $10, use the approximate areas beneath the normal curve.

  Determine the amounts petra will pay under the arrangement

Petra borrowed $12,500 thirty months ago from a lender who charges interest of 4.05 percent compounded monthly. She wants to borrow $10,000 more today. The original lender will not increase her loan, so she has found a new lender

  Determine what are the determinants of demand

The demand for a product can change due to manyfactors. Distinguish between a change in demand and a change inquantity demanded. What are the determinants of demand What arethe determinants of supply

  Why marginal cost pricing forever as punishment strategy

Suppose that there are three firms, who produce homogeneous products, and whom have the same marginal cost which is constant over output. These firms play an infinitely repeated Bertrand pricing game. Each period they simultaneously set prices.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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