In the country of Sparta, money supply equals 11 million drams, real GDP is 80 million drams, the price level is 1.1, and the velocity of money is 8. a. What is the value of its nominal GDP? Nominal GDP: $| |million drams. b. If, in the next year, V remains constant and real GDP increases to 88 million drams, what must happen to money supply in order to keep prices stable? Round your answer below to 1 decimal place. Money supply must (Click to select) to $ ]million drams.

In the country of Sparta, money supply equals 11 million drams, real GDP is 80 million drams, the price level is 1.1, and the velocity of money is 8. a. What is the value of its nominal GDP? Nominal GDP: $| |million drams. b. If, in the next year, V remains constant and real GDP increases to 88 million drams, what must happen to money supply in order to keep prices stable? Round your answer below to 1 decimal place. Money supply must (Click to select) to $ ]million drams.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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