Using the quantity equation of money MV PQ, calculate the price level (P) if the money supply (M) is 1000 equals 2, and the real GDP (Q) equals 200. Select the correct answer below: O 1500 O 3.5 45 O 10
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- What is the basic quantity equation of money?Suppose you receive Tk. 10,000 from your grandmother and deposits the money in a saving account. your grandmother gave you the money by writing a check on her saving account. Would the maximum increase in the money supply still be what you found it to be in part a) where you received the money from the sky? Why or why not? can anyone explain please why it will changeSuppose the relevant money-supply curve is the one labeled MS₁; also suppose the economy's real GDP is 30,000 for the year. If the market for money is in equilibrium, then the velocity of money is approximately 2.0 O 12.0 2.9 O 0.5 VALUE OF MONEY 0.5 0.35 MS, 5000 MS₂ 9000 QUANTITY OF MONEY MD
- 10 - Which of the following depends on the demand for money, which we say just in case and for this purpose?A) IncomeB) to KeynesC) to the economyD) to interestE) InvestmentWhat is the basic determinant of ( a ) the transactions demand and (b) the asset demand for money? Explain how these two demands can be combined graphically to determine total money demand. How is the equilibrium interest rate in the money market determined? Use a graph to show the impact of an increase in the total demand for money on the equilibrium interest rate (no change in money supply). Use your general knowledge of equilibrium prices to explain why the previous interest rate is no longer sustainable.Again, consider an economy with real output of 400 and an average price level of $2. While velocity and the price level are constant, this economy's real output is increasing by 1.25 percent per year. Recall also that the average dollar in this economy is spent 10 times over a year, Calculate the percentage change in the money supply this economy is experiencing. Enter your answer "as a percent, but without the percentage sign." Show an increase in the money supply with a positive number (no sign) and a decrease with a negative number (with negative sign). For example, if the money supply is falling by 99 percent, enter only -99 in the blank.
- All other factors held constant what would be the effect All other factors held constant, what would be the effect on the demand for money (M1) of each of the following situations. Explain the rationale behind your responses.1. An increase in real GDP2. An increase in general price levels3. A rise in the interest rate on savings accounts and Treasury securities.4. A doubling of all prices, wages, and incomes. All other factors held constant what would be the effectQuestion 39 FIGURE 1 MS r2 P2 P1 r1 MD2 AD MD, REFER TO FIGURE 1. A decrease in Y from Y, to Y2 is explained as follows: O A decrease in P from P2 to P1 causes the money-demand curve to shift from MD1 to MD2; this shift of MD causes r to increase from r1 to r2; and this increase in r causes Y to deçrease from Y1 to Y2. O An increase in the price level causes the money-demand curve to shift from MD2 to MD1; this shift of MD causes r to decrease from r2 to r1; and this decrease in r causes Y to decrease from Y1 to Y2. O An increase in P from P1 to P2 causes the money-demand curve to shift from MD1 to MD2; this shift of MD causes r to increase from r1 to r2; and this increase in r causes Y to decrease from Y1 to Y2. O The Federal Reserve increases the money supply, causing the money-demand curve to shift from MD1 to MD2; this shift of MD causes r to increase from r1 to r2; and this increase in r causes Y to decrease from Y1 to Y2.Give typing answer with explanation and conclusion A standard "money demand" function used by macroeconomists has the form ln(m)=β0+β1ln(GDP)+β2R, Where m is the quantity of (real) money, GDP is the value of (real) gross domesticproduct, and R is the value of the nominal interest rate measured in percent per year. Supposed that β1 = 2.66 and β2 = −0.05. A) What is the expected change in m if GDP increases by 4%? The value of m is expected to_________(increase or decrease ) by approximately ________% (Round your response to the nearest integer) B) What is projected to change in m if the interest rate increases form 2% to 6% ? The value of m is expected to ________(increase/decrease) by approximately ________% (Round your response to the nearest integer)
- 6. Assume the demand for real money balances is given by Ma/P = Y/6-150i. price level =100 a) Find the equilibrium interest rate if the money supply is $1,700 and output equals 129. b) Find the new equilibrium interest rate if the money supply is $1,700 and output increases to 138. c) Plot both interest rates and demand curves on the same graph.Assume that money demand in a given economy is represented with MD = 100Pe 2 -50i where i is the nominal interest rate expressed in decimal form. Moreover, assume that the real interest rate is equal to 0 and money is neutral. What is the seignorage maximizing level of the rate of growth of money? a) 2% b) 5% c) -3% d) None of the aboveQ47 Which of the following is the definition for the real supply of money? Select one: a. the actual quantity of money, rather than the officially reported quantity. b. the stock of high powered money only. c. the ratio of the real GDP to the nominal money supply. d. the stock of money measured in terms of goods, not dollars.
