Suppose that this year's money supply is $500 billion, nominal GDP is 10 trillion and real GDP is $5 trillion.
a) What is the price level? what is the velocity of money?
b) If the fed keeps their money constant and the velocity is constant and the output of goods and services increase by 5% a year.
c) What will happen to nominal GDP and the price level of next year?
will this lead to a higher nominal GDP and GDP deflator?
d) What money supply should the fed set next year for stability?
-What money supply should the fed set next year if it wants inflation of 10%?
Recently Asked Questions
- what changes in America that occurred in the 1970s, economic issues, population shifts, the growth of new ideologies and ways of thinking, the rise of new
- The money demand curve is downward sloping because : 21 ) ______
- The Kelso Division produces and sells a product to external and internal customers . Per-unit information about its operations include : Selling price per unit