Answered: The money supply in Goldova is $100…

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. 8

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: Money Growth And Intlation

Section: Chapter Questions

Problem 2CQQ

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Question

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. 8

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Step 1: Understand the Variables

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Step 2: Calculate the Velocity of Money (V)

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Step 3: Use the Equation of Exchange to Find P

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