An economy has a constant population. Everyone's demand for chequing deposits is

5,000 goods in total in every period. The economy has a total endowment of 10,000

goods per period. There is a total stock of unintermediated capital of 1,000 goods in

each period. Bank deposits are the only form of money in the economy. Deposits of

banks are subject to a 20 percent reserve requirement. The net real rate of return on

capital is 10 percent per period. After meeting the reserve requirement, banks invest the

remainder of all deposits into capital. Individuals do not hold capital. The fiat money

stock is $2,000 per period. Capital takes two periods to generate final returns.

21. What is this economy's price level?

(A) 0.2.

(B) 0.3.

(C) 0.4.

(D) 0.5.

22. What is the total nominal money stock, M1t?

(A) $20,000.

(B) $10,000.

(C) $2,500.

(D) $1,500.

23. What is the money multiplier?

(A) 20.

(B) 10.

(C) 5.

(D) 2.

24. What is the total (nal) capital output after two periods?

(A) 6,050.

(B) 4,840.

(C) 1,210.

(D) 1,000.

25. What is this economy's real GDP?

(A) 16,050.

(B) 14,840.

(C) 11,560.

(D) 10,000