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velocity and aggregate output remain constant at 5 and $1 090 billion , respectively , what happens to the price level if the money supply declines...

Money and Banking homework questions


the questions are in the attached file

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962B2463-BAFB-45DB-B0A0-77331621DB70.jpeg

velocity and aggregate output remain constant at 5 and $1 090 billion , respectively , what
happens to the price level if the money supply declines from $400 billion to $300 billion
ppens to the
2 . What happens to nominal GDP if the money supply grows by 20 % but velocity declines by
309%
3 . suppose the liquidity preference function is given by
L ( in
1090
Use the money demand equation along with the following table of values , to calculate the
ateth
velocity for each period
Period Period Period Period Period Period Period
Interest rate
0.05
0.07
0 03
0.05
0.07
0.04
0.06
Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period ?
( in billions ) 12090
12.500
12.250 12,500
2.800
13.000 13. 200
Interest Rate
0 0
0. 07
0 03
DO
0 07
0 04
0.06

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