a. What increase in aggregate demand is necessary to achieve this? $ 15 billions. b. If successful, what will be the growth rate? Round your answer below to 2 decimal places. % c. If successful, what will be the inflation rate? Round your answer below to 2 decimal places. 8.33 %
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- What is the inflation rate? Year Money supply GDP Assume that the velocity of money is constant. (Write your answer in percentage. If your answer is 0.0222, write 2.22.) 2015 1,200 12,000 2016 1,220 12,550In early 2017, policymakers at the Federal Reserve forecast that real GDP during 2017 would increase faster than potential GDP and that the inflation rate for the year would be about 1.9 percent. Source: Federal Open Market Committee, "Advance Release of Table 1 of the Summary of Economic Projections to be Released with the FOMC Minutes," March15, 2017. Fill in the missing values in the table with estimates that are consistent with these forecasts. Assume that the growth rate for real GDP between 2016 and 2017 is 0.32 percentage points higher than the percentage change in potential output between those years (rounded to two decimal places). 2016 2017 Real GDP $16.7 trillion $nothing trillion Potential GDP $16.9 trillion $17.1 trillion GDP Deflator 111.5 nothing (Enter your responses rounded to one decimal place.)Consider a simple economy that produces only pies. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2019, the money supply was $240, the price of a pie was $7.20, and the economy produced 500 pies. Year Quantity of Money Velocity of Money Price Level Quantity of Output Nominal GDP (Dollars) (Dollars) (Pies) (Dollars) 2019 240 7.20 500 2020 252 15 500 The money supply grew at a rate of from 2019 to 2020. Since pie output did not change from 2019 to 2020 and the velocity of money , the change in the money supply was reflected in changes in the price level. The inflation rate from 2019 to 2020 was .
- Use the diagrams below to answer the following questions. Figure 27-5 Interest Rate Price Level 5% 4% 2% 1% 105 102 100 500 540 754 800 806 M Mo Quantity of Money (5) ADI AD Real GDP (Shillo)Consider a simple economy that produces only pies. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2012, the money supply was $280, the price of a pie was $7.00, and the economy produced 600 pies. Fill in the missing values in the following table, rounding to the nearest cent when necessary. Year Quantity of Money Velocity of Money Price Level Quantity of Output Nominal GDP (Dollars) (Dollars) (Pies) (Dollars) 2012 280 2013 294 15 7.00 600 600 The money supply grew at a rate of from 2012 to 2013. Since pie output did not change from 2012 to 2013 and the velocity of money, the change in the money supply was reflected in changes in the price level. The inflation rate from 2012 to 2013 wasWhat happens to the value of nominal interest rate in the economy when the Federal Reserve buys government securities
- Consider a simple economy that produces only pies. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2016, the money supply was 100, the price of a pie was $5.00, and the economy produced 200 pies. Fill in the missing values in the following table, rounding to the nearest cent when necessary. Year Money Supply Velocity of Money Price Level Quantity of Output Nominal GDP (Dollars) (Dollars) (Pies) (Dollars) 2016 100 5.00 200 2017 105 10 200 The money supply grew at a rate of______% from 2016 to 2017. Since pie output did not change from 2016 to 2017 and the velocity of money _______ , the change in the money supply was reflected _________ in changes in the price level. The inflation rate from 2016 to 2017 was _____%.Consider the following table from Source: 5220.0 Australian National Accounts: State Accounts, Table 7 - Tasmania, that gives nominal GSP (current prices) and real GSP (chain volume) for Tasmania. Tas GSP Tas GSP (Current (Chain Volume) 28931 Prices) Jun-2017 30019 Jun-2018 30263 30975 Jun-2019 31993 31993 Jun-2020 32904 32102 a. Calculate the implicit GSP price deflator. Feel free to use MS Excel. 6. Calculate the growth rate in Nominal GSP, Real GSP and the price deflator. c. What do you notice about the sum of the Real GSP and price deflator growth rates?Consider a simple economy that produces only pens. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2014, the money supply was 100, the price of a pen was $4.00, and the economy produced 500 pens. Fill in the missing values in the following table, rounding to the nearest cent when necessary. Money Supply Price Level Year (Dollars) Velocity of Money 2014 100 (Dollars) 4.00 Quantity of Output (Pens) Nominal GDP (Dollars) 500 2015 101 20 500 The money supply grew at a rate of money 2014 to 2015 was % % from 2014 to 2015. Since pen output did not change from 2014 to 2015 and the velocity of in changes in the price level. The inflation rate from ' the change in the money supply was reflected
- 15. When an SME’s functional currency is the currency of a hyperinflationary economy, a. all amounts in the financial statements shall be stated in terms of the measuring unit current at the end of the reporting period. b. some amounts in the financial statements shall be stated in terms of the measuring unit current at the end of the reporting period. c. all amounts for monetary assets and liabilities in the financial statements shall be restated using the general price index, rather than the specific price index. d. none of these. The PFRS for SMEs does not address this matter.Consider an economy with the following measures: (a) The nominal interest rate is 2%. The rate of growth of money supply is 5%. The velocity growth is constant. What is the growth in nominal GDP? ) In the context of introduction of robots into manufacturing, what is the difference be- (b) tween the productivity effect and the reinstatement effect? (c) thinking about the effect of higher capital income taxes. 3) Briefly describe any two of the three elasticities that Diamond and Saez mention inQuestion 1 a. Increasing prices erode the purchasing power of the dollar. It is interesting to compute what goods would have cost at some point in the past after adjusting for inflation. Go to the Federal Reserve Bank of St. Louis, FRED database website at https://research.stlouisfed.org/fred2/and find the consumer price index for all urban consumers. What would a car that cost $25,000 today have cost the year 1996? b. Many countries have central banks that are responsible for their nation’s monetary policy. Go to www.bis.org/cbanks.htm and select one of the central banks (for example, ECB, Norway). Review that bank’s Web site to determine its policies regarding application of monetary policy. How does this bank’s policies compare to those of the U.S. central bank?