4. Suppose demand for real money balance is = 500 + 0.2Y – 1000i. P If P = 10, Y= 1000, and I = 0.10, and the money market is in equilibrium, What is the equilibrium stock of nominal money? What is the velocity of money? Suppose there is an autonomous increase in money demand by 100, with a constant nominal money supply, P = 10, and Y= 1000, what is the equilibrium i? If the central bank wishes to maintain i = 0.10, what must the nominal money supply be? Draw and label completely a money market equilibrium diagram. Label equilibrium M/P and i with their actual values. Draw and carefully label the changes that result from (c) and (d) above. а. b. с. d. е.

Initially, the Central Bank sets the equilibrium interest rate at 7% at which money supply is equal to money demand. Suppose now nominal income starts to increase. What should the Central Bank do if it wants to maintain the interest rate constant at 7%? а. All of the answers are incorrect b. The Central Bank should increase the money supply by selling government bonds С. The Central Bank should reduce the money supply by selling government bonds d. The Central Bank should reduce the money supply by buying government bonds е. The Central Bank should increase the money supply by buying government bonds

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1) Assume that the quantity theory of money holds and that velocity is constant at 5. Output is fixed at its full-employment value of 10,000, and the price level is 2. a) Determine the real and the nominal demand for money. b) The government fixes the nominal money supply in this same economy at 5,000. With output fixed at its full-employment level and assuming that prices are flexible, what will be the new price level? What happens to the price level if the nominal money supply rises to 6000?

Suppose that the Federal Reserve conducts an open market sale. This is considered monetary policy. In response, the size of the monetary base and the size of the money supply O contractionary; grows; grows by more expansionary: grows; grows by more contractionary; shrinks; shrinks by less O contractionary; shrinks; shrinks by more O expansionary; grows; grows by less

Can you solve for d) please and thanks

. What is the opportunity cost of holding money? How is k related to the velocity of money? s. Use the Quantity Theory of Money to explain how long run inflation occurs. If the Federal Reserve Bank wishes to keep the inflation rate at zero percent, at what rate should the money supply grow? Why?

The neutrality of money revisited a. Fill in the empty spaces after Year 1 in the chart below: b. What is the growth rate of the nominal money supply between years 1 and 2, 2 and 3, and 3 and 4? c. What is the rate of inflation between years 1 and 2, 2 and 3, and 3 and 4? d. What is the change in the real money supply between years 1 and 2, 2 and 3, and 3 and 4? e. What assumption has been made about real output growth if this data describe the medium run?

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In the country of Juventus, the money supply is equal to $52 (bilion), the velocity of circulation is 5, and real GDP is $100 (bilion) a. What is the price level in Juventus, and what is the valur of its nominal GDP? Round your price level to 2 decimal places Price level Nominal GDP b. If money supply increases by 20 percent, what will be the new values of the price level and nominal GDP, assuming that Vand real GDP remain constant? Round your price level to 2 decmal olaces Price levet Nominal GDP c What does this suggest about the connection between money supply atnd price level? The relationship between money supply and price level in this case is Cick to select)