1. According to Hume's Price Specie Flow Mechanism, if country A is trading with country B, what happens with the gold flow when country A has prices lower than Country B? WHY?

2. Explain which economic scenario (boom, bust, stagflation, supply-side expansion) occurs for Country A and support your claim using the Quantity Theory of Money. Assume that velocity is constant

3: Using the Quantity Theory of Money: M * V = P * Y

Assuming that V increases by 1%, M increases by 10% and Y increases by 3%, then

a. What would be the percentage increase or decrease in the general price level?

b. Which scenario would this equation reflect? Would it be a boom, bust, stagflation or a supply side economic expansion? WHY?

4:

A. What was the Specie Circular executive order made by President Jackson.

B. What was happening in the economy and specifically in the sale of public lands that made President Jackson enact the Specie Circular executive order?

C. What was the order's effect on the economy? In other words, which of the four possible scenarios did his action support: Boom, Bust, Stagflation, or Supply-side Expansion?

Use the Quantity Theory of Money to support your explanation. Assume that velocity stays constant