Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Define the Fisher equation
Fisher equation is:
Money supply (stock of money) x velocity of circulation of money = price level x total transactions in the economy or MV = PT
In Fisher equation, for a specific time period say a year, the stock of money in economy (or money supply) shown by the symbol (M) multiplied by velocity of circulation of money (the number of times money changes hands) or (V) equals the price level (P) multiplied by total number of transactions (T). A transaction takes place when a service or good bought. T measures all purchases of services and goods in the economy.
To convert the equation of exchange (MV = PT) - which is true by definition - into a theory of inflation it is essential to make three assumptions. The first two are:
Supposing the government allows the money supply to expand faster than the rate at which real national output increases. Consequently households and firms possess money balances (or stocks of money) which are greater than those they wish to hold. According to quantity theory these excess money balances will quickly be spent. This brings us to third assumption in the quantity theory: changes in the money supply are presumed to bring about changes in price level (rather than vice versa).
explain the terms abnormal profits and normal profits
The more certain private property rights are, a. the less people need to invest in education or human capital development. b. The less entrepreneurship there will be. c. t
Individual A has UA(XA,YA)=lnXA+2YA and has $500. PX=5 and PY =10. (a) Find the optimum. Show that it is indeed the maximum. (b) PX=10. Find the new optimum. (c) Calculate
The rest of the world in the cross model Imports Im(Y) depends positively on Y in the cross model In the classical model, imports doesn't depen
Explain clearly the liquidity preference theory of interest propounded by j.m.keynes
The structural deficit: A. falls as the economy expands and rises when it contracts. B. changes as actual income changes regardless of potential income. C. does not change when inc
Q. Explain the problem with IS-LM model? The starting point of AS-AD model is an assumption in IS-LM model (and in the cross model) that limits its usefulness. This is an assum
What would happen to the US market of new homes, if Bank of America raises interest rates, from 1% to 3%?
Q. Definition of Money? Before talking over macroeconomic models we should define what we mean by money. Money has aninteresting and long history and an understanding of how we
For a single nonprofit provider, describe an output-maximizing model to predict supplier behavior.
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd