Monetary Policy Action Question

Please use the following data for Macroland $to$ answer the questions. This economy $at$ real full employment

output $is$ $$70$ billion.

$M=10$ billion

$V=10$

$P=2$

$Y=$ billion

$a.$ Please solve for $Y.(Thisis$ the current level $of$ real $GDP)$

$b.$ How much $is$ current level $of$ nominal $GDP?$

$c.$ How big $is$ the gap $in$ real terms? What type $of$ gap $is$ this economy experiencing?

$d.$ What type $of$ monetary policy should the $FRB$ adopt $to$ close this gap? How much should the money

supply change $to$ close the gap? $(other$ things being equal, hold $V$ and $P$ constant$)$

$e.$ Construct $an$ idealized money market and show the change $in$ money supply $to$ close the gap. Next,

construct $an$ idealized $A\frac{D}{A}S$ model showing the related change $to$ close the gap.