Consider the Quantity Theory of Money (M1 x V = YP). In year 2020 the price level
Fantastic news! We've Found the answer you've been seeking!
Question:
Consider the Quantity Theory of Money (M1 x V = YP). In year 2020 the price level is P =1 (GDP deflator is 100), and real GDP is Y=$20 trillion. In year 2020, M1= $5 trillion.
a. In 2020: What does is the velocity of money (V)?
b. If real GDP in 2030 is Y=$25 trillion (as measured in 2020 prices); M1 has increased to $20 trillion; and assuming V is unchanged from part a: What will be the price level P in 2030?
Related Book For
Posted Date: