soln3 - Problem Set#3 Solutions Textbook Chapter 8 Exercise...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Problem Set #3 Solutions Textbook Chapter 8 Exercise 5: Y Y V V M M - + = π Your mandate is price stability, so π = 0. Therefore: V V Y Y M M - = a.) % 4 = M M b.) % 1 - = M M c.) % 3 = M M d.) % 2 - = M M e.) % 1 %) 1 ( = - - = M M Textbook Chapter 8 Exercise 14: a.) As derived in class: M M V PY M M M PY M × = × = 1 Inflation tax as a proportion of GDP equals the money growth rate times money as a proportion of GDP. b.) As derived in class:
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
PY M Y Y PY M × + π = c.) Assume that % 2 = Y Y i. From Economic Report of the President, 2008 M = Monetary Base = $149,021 Million (Table B-71) PY = Nominal GDP = $3,128.4 Trillion (Table B-1) π = 10.3% (Table B-63 (Year to year)) Therefore 0059 . 4 . 128 , 3 $ 149 $ %) 2 % 3 . 10 ( = + = × + π = Trillion Trillion PY M Y Y PY M ii. From Economic Report of the President, 2008 M = Monetary Base = $788,135 Million (Table B-71)
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/17/2008 for the course ECON 502.02 taught by Professor Mccafferty during the Spring '08 term at Ohio State.

Page1 / 3

soln3 - Problem Set#3 Solutions Textbook Chapter 8 Exercise...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online