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!
Q. Determine price level from the quantity theory of money?
The price level
The price level is determined from the quantity theory of money: P = (M.V)/Y
In the classical model, money supply M is an exogenous variable (therefore, growth rate in the money supply pM is exogenous). It is concluded by the central bank. In the same way V is an exogenous variable in agreement with quantity theory of money. So M.V is exogenous and given.
Remember that Y is determined by labour market and production function. If we combine this with quantity theory of money, we can determine the price level P: P = (M.V)/Y.
Now, assume that GDP is constant over time. Because V is stable (let's say it too is constant), percentage change in P is equal to percentage change in M. Which is, inflation is equal to the growth rate of money or p = pM.
Remember that we have removed the trend in Y that means Y cycles around some average over time. So Y isn't constant over time though there is no growth in Y. Thus p = pM will still be approximately true even when Y isn't constant (it will be true on average and in long run).
If we don't remove the trend in Y, result would instead be that inflation is equal to growth in money supply minus the growth in real GDP.
Suppose that 70% of people who identify themselves as an "Independent" voter end up voting for a Republican candidate. What is the probability that out of 120 "independent" voters
effects of real wage existing in the market that is lower than the equlibrium real wage.what will happen in this labour market if it is perfectly competitive
what is business cycle
What is productivity? Productivity or average product (AP): It is output person which is output divided through number of workers AP= Q/L. There labour Productivity can
given the consumer maximizing problem subjest to consumption, the firm''s maximizing problem subject to revenue as a function of labour demand, and the government''s budget as G=T.
When did mortgage? Default and housing foreclosure rates begin to rise rapidly? When did the economy go into recession? Was there a causal relationship between the two? Discuss.
Since their inception, VAR models have been at the centre of many controversies associated with econometric modelling. The recurring criticism throughout history is due to the mode
Functions of Money During the course of history money has taken various forms. In fact, there is no difficulty in identifying money but the problem is defining money. Economis
what have you learned from the class
Examine the pros and cons of commercial transactions in blood from the egoistic, the utilitarian, and the Kantian perspectives
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