Why is the theory of inflation

Assignment Help Macroeconomics

Reference no: EM13786504

1. Why is the theory of inflation that we have learnt in the class called classical theory?

2. Give an example of a transaction whose value does not qualify as a part of nominal GDP. Also give an example where it does.

3. Suppose that the velocity of money is constant. Now, real GDP grows by 5% per year, the money stock grows by 14% per year and the nominal interest rate is 11%. Calculate the real interest rate.

4. Suppose a country has a money demand function (M/P)d= kY, where k is a constant parameter. The money supply grows by 12% per year and the real income grows by 4% per year.

5. Define seigniorage. Suppose Fed prints one thousand $10 bills incurring a cost of $0.5/bill. What is the seigniorage here?

6. Define inflation tax

Reference no: EM13786504

Questions Cloud

Discussion about ifrs versus gaap : Write a 700- to 1,050-word summary of the team's discussion about IFRS versus GAAP, based on your team collaborative discussions.

Discuss theories of emotional development : Discuss theories of emotional development. What does each theory emphasize? How are the theories similar, how do they differ?

Does susan have an ethical obligation : If the city knew about the instability of Custom Transportation, it might prefer to give the contract to Worldwide Transportation, whose bid was higher than Custom Transportation's bid by only a small amount. Does Susan have an ethical obligation..

Specify the key functional areas of hrm : Specify the key functional areas of Human Resources Management

Why is the theory of inflation : Why is the theory of inflation that we have learnt in the class called classical theory - transaction whose value does not qualify as a part of nominal GDP

Define collaboration and social media : While planning for a new project, a young developer mentions that she used Facebook as a collaborative group space for developing her senior project. She tells you that it was the ideal solution since it was free and all of her group members were ..

Issues inherent in the u.s. health care system : What do you consider to be the most important factor in fixing the numerous issues inherent in the U.S. health care system?

Design the study using an experimental design : Imagine you were conducting research on the relationship between academic performance (e.g., better grades) and different levels of loudness of music (interval scale) while studying.

Assignment on human resources policies and procedures : Normal 0 false false false EN-US X-NONE X-NONE Human Resources Policies and..

User Account

All Pages