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23 Nov 2019

If quantity of money is $3 trillion, real GDP is $10 trillion, the price level is ..09, the real interest rate 2 percent a year, and the nominal interest rate is 7 percent a year, calculate the velocity of circulation, the value M times V, and nominal GDP?

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Patrina Schowalter
Patrina SchowalterLv2
21 Jun 2019
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Related questions

Suppose that this year’s money supply is $500 billion, nominal GDP is $10 trillion, and real GDP is $5 trillion.

a. What is the price level? What is the velocity of money?

b. Suppose that velocity is constant and the economy’s output of goods and services rises by 5 percent each year. What will happen to nominal GDP and the price level next year if the Fed keeps the money supply constant?

c. What money supply should the Fed set next year if it wants to keep the price level stable?

d. What money supply should the Fed set next year if it wants inflation of 10 percent?

A. If the structural unemployment rate is 2% and the frictional unemployment rate is 3% in a certain year and the actual unemployment rate is 7.8%, nominal GDP is $12 trillion. What is the size of the GDP gap in percentage terms? And what kind of gap is this economy experiencing?

Calculate Lost GDP and Potential GDP.

B. Suppose an economy's nominal GDP was $12 trillion in 2010 and $9.5 trillion in 2011. Assume the GDP price index was 175 in 2010 and 177 in 2011.

What is the economic growth rate of this economy's real GDP? What is the growth rate in nominal GDP?

What is the inflation rate in this economy?

C. If the price level increases by 15% while nominal income increases by 8%, then real income would fall by about what percent?

Velocity remains constant at 8 and the money supply increases from $200 billion to $300 billion.

The original, nominal GDP was $ __ trillion? (Round your response to two decimal places)

The new, nominal GDP is $ __ trillion? (Round your response to two decimal places)

If real GDP increased by 10%, then the price level increased by __ %? (Use the theory of inflation to solve this question.)

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