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Suppose that this year's the money supply is $500 billion, nominal GDP is $10 trillion, and real GDP is $5trillion. a. What is the price level?
b. What is the velocity of money?
c. Suppose that velocity of money is constant and the economy's output of goods and services (real GDP) rises by 5 percent each year. What will happen to nominal GDP and the price level if the Fed keeps the money supply constant?
I''m trying to figure out what the effect would be on LM or IS curve, and additionally the interest rate and income if (a) the transactional demand for money increases, (b) the liq
Suppose that Ana is buying only 2 goods: good 1 and 2. If the price of good 1 doubles and the price of good 2 drops by one third, then what happens with the budget constraint? (Ass
Determine the main target of monetary policy Since 1997 'official' main target of monetary policy has been to 'hit' inflation rate target set by government. Though since the o
Fiscal policy is the program of government’s with respect to the amount and composition of (i) expenditure: the purchase of commodities and services, and spending in the form of su
Once we have monthly data on a price index we can evaluate the inflation. In most nations, the percentage change in price index during one month is small. Hence it is more common t
You are the manager of a firm that receives revenues of $50,000 per year from product X and $80,000 per year from product Y. The own price elasticity of demand for product X is -3,
Explain how changes in the quality of healthcare will influence the demand for care.
he questions posed are broad and open ended so be careful to allow yourself enough research and planning time. If you are completely on top of the material delivered in class, then
what are the causes of inflationary gap
A government purchase real GDP. Are increases in government purchases associated with increases in real GDP?Describe the important characteristics of perfect competition and monopo
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