Answer 7 8 & 9

6. You, as mayor, introduce a minimum wage equal to the answer to the preceding question. What is the actual wage paid by Smithfield as a result? Zippy, George and Bungle are the sole inhabitants of Teddington. Their total holdings of $100 between them constitute the only currency in circulation; this doesn't change in any of the questions below. 7. On Monday Zippy pays George $5 for an ice cream; George buys a tricycle from Bungle for $35; Bungle buys nothing. What is the velocity of money V on Monday? 8. On Tuesday Zippy buys another ice cream from George for $10; George buys candy from Bungle for $5; Bungle buys a hat from Zippy. If the velocity of money V is equal to 0.7 on Tuesday, how much did Bungle pay Zippy for the hat? 9. The Teddington Statistical Agency calculates that the inflation rate, i.e. T = p, was 30% between Monday and Tuesday. What is the implied growth rate of Y, i.e. g = , between Monday and Tuesday