K The quantity of money is $2 trillion, real GDP is $9 trillion, the price level is 1.2, the real interest rate is 4 percent a year, and the nominal interest rate is 6 percent a year, Calculate the velocity of circulation, the value of Mx V, and nominal GDP. >>> Answer to 2 decimal places.
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- Assume GDP is currently $10,800 billion per year and the quantity of money is $540 billion. a. What is the velocity of money?a Imagine an economy has the following situation: Velocity of money (V) is constant, Nominal Money Supply (M) growth is 8%, Output (Y) growth is 4% and real interest rate (r) is 4%. Calculate the following: i. Nominal interest rate (i) ii. If State Bank of Pakistan (SBP) increases the money growth rate by 2 percent point per year, find Δi? iii. If the growth rate of Y decreases to 2% per annum, what will happen to the inflation rate (π)?What quantity is measured along the horizontal axis? the price level O the quantity of money O the real interest rate On the graph, MS represents the money supply and MD represents money demand. The usual quantities are measured along the axes. O the value of money 1.125- 1 0.875 0.75 0.625 + 05 0375 + 025 0.125- MS 5,000 MD₂ MD₁
- The money supply in Goldova is $100 billion. Nominal GDP is $400 billion, and real GDP is $200 billion. What is the price level in Goldova? a. 1 b. 2 c. 4 d. 8Milton Friedman argued that the Fed's control over the money supply could be used to peg a. the level of a nominal or real variable, but not the growth rate of a real or nominal variable. b. the level or growth rate of a real variable, but not the level or growth rate of a nominal variable. c. the level or growth rate of a nominal variable, but not the level or growth rate of a real variable. d. both levels and growth rates of both real and nominal variables.An increase in ________ decreases the quantity of money people want to hold. a. the price level b. real GDP c. the interest rate d. the quantity of money
- The velocity of circulation is growing at 5 percent a year, the real interest rate is 5 percent a year, the nominal interest rate is 10 percent a year, and the growth rate of real GDP is 3 percent a year. Calculate the inflation rate, the growth rate of money, and the growth rate of nominal GDP. stion Heip The inflation rate is percent a year. Enter your answer in the answer box and then click Check Answer. 2 parts remaining Clear All Check Answer javascript:doExercise(8); MacBook At DII 888 F12 吕0 F9 F10 F7 F8 F5 F6 F4 esc F2 F3 F1 $ % & # dele 1 2 3 4 5 T Y U Q W E tab K F G A S caps lock х C V shift command optic Bommand 身 I RWhen the money market is depicted in a diagram with the value of money on the vertical axis, what would shift money demand to the left? a. an increase in the price level b. a decrease in the price level c. a decrease in real GDP d. an increase in real GDP ہےWhat is the demand for money? When the nominal interest rate rises, does the opportunity cost of holding money increase or decrease? Does the quantity of money demanded increase or decrease? The demand for money is the relationship between the quantity of money demanded and the _______ when all other influences on the amount of money that people wish to hold remain the same. A. price of bonds B. real interest rate C. inflation rate D. nominal interest rate When the nominal interest rate rises, the opportunity cost of holding money _______ and the quantity of money demanded _______. A. falls; increases B. rises; decreases C. falls; decreases D. rises; increases
- If nominal GDP in an economy is $1500 and the money supply is $500, what is the velocity of money? a. 333 b. 5 c. 3 d. 7500An economy is at full employment. The quantity of money is growing at 8.3 percent a year, the nominal interest rate is 9.5 percent a year, real GDP is growing at 5.0 percent a year, and the inflation rate is 3.1 percent a year. What is the change in the velocity of circulation? Why might it be changing? The velocity of circulation is _______. A. increasing by 3.1 percent a year B. decreasing by 0.2 percent a year C. increasing by 0.2 percent a year D. constantIn the country of Orcam, the velocity of money is constant. Real GDP grows by 2 percent per year, the money stock grows by 10 percent per year, and the nominal interest rate is 15 percent. Calculate the growth rate of nominal GDP.
