Macroeconomics (7th Edition)
Macroeconomics (7th Edition)
7th Edition
ISBN: 9780134738314
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 14, Problem 14.5.5PA
To determine

Whether real GDP will increase or decrease.

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Briefly explain the difference between commodity money, commodity-backed money, and fiat money. In the past we have observed countries that have adopted fiat money standards on average have higher rates of inflation than countries with commodity-backed money standards. Briefly explain why that would be the case.
​5.5 If velocity does not chan​ge when the money supply of a country increases, will nominal GDP definitely increase? Will real GDP definitely increase? Briefly explain
What is velocity of money? List two major determinants of velocity of money.
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