Suppose: Money supply $80 million Price level = $5.00 Velocity of circulation = 4 times a)...
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Suppose: Money supply $80 million Price level = $5.00 Velocity of circulation = 4 times a) Determine the quantity of output, T b) If there is an increase in the money supply by 6% determine the new amount of money supply c) What happen to the price level? Determine the new price level. (Assuming others remain unchanged) d) Determine the rate of changes in the price level above. What is your conclusion? Suppose: Money supply $80 million Price level = $5.00 Velocity of circulation = 4 times a) Determine the quantity of output, T b) If there is an increase in the money supply by 6% determine the new amount of money supply c) What happen to the price level? Determine the new price level. (Assuming others remain unchanged) d) Determine the rate of changes in the price level above. What is your conclusion?
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