Make use of the quantity equation to answer the following problem. If the Fed increases the money supply by 6%, economic growth is 2%, and inflation is 2%, what is happening to the velocity of money? Be specific
What will be an ideal response?
Since the percent change in the money supply plus the percent change in velocity equals the percent change in real GDP plus the percent change in the price level, velocity is declining by 2%.
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Suppose that John has many of the same characteristics as the stereotypical mathematician. According to the representative heuristic, this will tend to make people think that:
A. many people are bad at math. B. John is good at math. C. John is bad at math. D. many people are good at math.
The consumer optimum is the set of goods and services, subject to the limited income of the consumer, that
A. is characterized by zero marginal utility on each good and service. B. maximizes the level of satisfaction for each consumer. C. is characterized by increasing marginal utility. D. the consumer can afford to buy.
When bond prices go up, interest rates
A. go up. B. stay the same. C. go down. D. may go up, stay the same, or go down.
Whether you are studying the money economy of the U.S., Pakistan, China, or the Federated States of Micronesia, for a good to serve as money anywhere, it has to provide three essential services. These are: a medium of exchange, a
a. measure of value, and be portable b. store of value, and be durable c. measure of value, and a store of value d. measure of value, and be portable e. store of value, and be portable