hw4f11 (1)

# hw4f11 (1) - Print name Sign name Recitation TA Hour 520...

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Print name___________________ Sign name _____________________ Recitation TA & Hour_______________________ Econ 520 F11 Homework 4 10/13, due 10/14 For full credit, show your calculations on each problem. 1. (10 homework points) If real money balances are \$2000 billion (Year 2011 dollars), and the nominal money stock is expanding at an annual rate of 20%/year, what is the annual rate of seigniorage (in 2011 dollars)? Assume for simplicity that the government directly creates the entire money stock and pays no interest on it: 2. (10 homework points) If real money balances are \$2000 billion (2011 dollars), what annual rate of expansion of the nominal money stock is required to meet a seigniorage target of \$600 billion (2011 dollars) per year? Assume for simplicity that the government directly creates the entire money stock and pays no interest on it: 3. (10 homework points) If real money balances are \$2000 billion (2011 dollars), and inflation is 30%/year, what is the annual inflation tax on money balances (in 2011 dollars)?

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## This note was uploaded on 11/20/2011 for the course FINANCE 640,722 taught by Professor Chabiyo,reeves during the Fall '11 term at Ohio State.

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hw4f11 (1) - Print name Sign name Recitation TA Hour 520...

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