If velocity does not change when the money supply of a country increases, will nominal GDP definitely

Question:

If velocity does not change when the money supply of a country increases, will nominal GDP definitely increase? Will real GDP definitely increase? Briefly explain.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Economics

ISBN: 978-0134106243

6th edition

Authors: R. Glenn Hubbard

See More Books

Question Posted: Nov 01, 2017 07:52 AM

See More Questions

The equation of exchange states that the quantity of money multiplied by the velocity of circulation equals real GDP multiplied by the price level. If the economy is at full employment and velocity...
If the Fed makes the quantity of money grow at the same rate as the growth rate of real GDP and velocity does not change, in the long run what happens to the price level and the inflation rate?
Multiple Choice Questions: 1. If the Fed sells a U.S. government bond from a member of the public, a. The banking system has more reserves, and the money supply tends to grow. b. The banking system...
Consider three (ideally other) countries for which evidence features here. What are the key influences on cross-national comparative variation in the place and role of the HRM function?
Distinguish between cash-basis accounting and accrual basis accounting. Why is accrual-basis accounting acceptable for most business enterprises and the cash basis unacceptable in the preparation of...
Numerous browser features, add-ins, and other tools exist for blocking third-party cookies. Search the Web for block third-party cookies for xxx, and fill in the xxx with the name and version of your...
Assume the continuous-time CAPM holds: (i r)dt = dSi Si dWm Wm for each asset i, where Wm denotes the value of the market portfolio, = Wm, and denotes the aggregate absolute risk aversion. Define...
Last year, Lakeshas Lounge Furniture Corporation had an ROE of 17.5 percent and a dividend payout ratio of 20 percent. What is the sustainable growth rate?
and what is the value of letter M ? A beverage shop operates a number of soft drinks. The fixed weekly expense of a soft drink is $2,200 and the variable cost per a drink is $0.44. Fill in the...
A ship's draft is 6.40 meters forward and 6.60 meters aft. FWA=180 mm. The density of the dock water is 1010 kg per cubic meter. If the load mean draft in saltwater is 6.7 meters. Find the final...
If the money supply is growing at a rate of 6 percent per year, real GDP is growing at a rate of 3 percent per year, and velocity is constant, what will the inflation rate be? If velocity is...
During the years from 2010 to 2014, the average annual growth rate of M1 was 12.7 percent, while the inflation rate as measured by the GDP deflator averaged 1.8 percent. Are these values consistent...
Below is a list of transactions completed by Direct Fashion during 2020. Ignore GST. For each transaction, indicate (a) the section (i.e. operating, investing or financing) of the statement of cash...
4. Consider the RC circuit shown below: R C C2 The capacitors are connected in parallel. Use C = 120 F, C = 30F, R = 5002, and = 40V. The capacitors are initially uncharged and at t=0 the switch is...
The DuPont equation shows the relationships among asset management, debt management, and profitability of improving the firm's performance. Its equation is: ratios. Management can use the DuPont...
38. A pendulum bob of mass 0.200 kg is pulled to one side such that it has a height of 0.50 m relative to its rest position (that is, its lowest point). It is then released so that it swings back and...
Let A in K ^ ( n \ times n ) be an ( n \ times n ) - matrix. Show that there ist a basis B of K ^ n that consists of eigenvectors of A .
Using the "you" view is an effective way for writers to avoid taking on blame in business messages. O True False
Some companies have gone as far as refusing to employ (or continuing to employ) workers who these companies know engage in legal, but unhealthy activities (such as drinking or smoking) while off the...
The baseball player A hits the ball from a height of 3.36 ft with an initial velocity of 34.8 ft/s. 0.14 seconds after the ball is hit, player B who is standing 15 ft away from home plate begins to...
A 30-year mortgage for $120,000 has been issued. The interest rate is 10% and payments are made monthly. Print out the balance due, principal payment and interest payment for each period.
A homeowner may upgrade a furnace that runs on fuel oil to a natural gas unit. The investment win be $2500 installed. The cost of the natural gas will average $60 per month over the year, instead of...
Develop a general-purpose spreadsheet to calculate A out the balance due, principal payment, ~d interest payment for each period of a loan. The user inputs to the spreadsheet will be the loan amount,...
3. The nominal interest rate compounded monthly when your $7,000 becomes $11,700 in eight years is ________
An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 21% and a standard deviation of return of 39%. Stock B has an expected return of 14% and a...
Advanced Small Business Certifica Drag and Drop the highlighted items into the correct boxes depending on whether they increase or decrease Alex's stock basis. Note your answers- you'll need them for...

If velocity does not change when the money supply of a country increases, will nominal GDP definitely

Question:

Step by Step Answer:

The quantity theory of money states that the money supply M multiplied by the veloci...View the full answer

Economics

Students also viewed these Micro Economics questions