PS1 - have totaled around $160.1 billion, about $124.6...

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2. As k is the reciprocal of Velocity of money they will move together but in opposite direction. As seen from the graphs above, the velocity of money has been fairly stable neglecting the vast drop these last 36 months. The first period I choose to explain The savings and loan crisis of the 1980s and 1990s. One can see how the velocity of money is reduced from the late 80’s for almost a decade. This is due to the S&L crisis, the failure of 747 savings and loans associations. The ultimate cost of the crisis is estimated to
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Unformatted text preview: have totaled around $160.1 billion, about $124.6 billion of which was directly paid for by the US government via a financial bailout under the leadership of George H.W. Bush. The second is the last 36 months this economy has experienced. The bank crisis during this period between 2007 until today the banks has almost stop extending credit and increased their reserve ratio immensely, hence the extreme drop in the velocity of money....
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This note was uploaded on 10/21/2010 for the course ECON 1530 taught by Professor Ohly during the Spring '10 term at Dartmouth.

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