Consider the Aggregate Demand implied by the quantity theory of money.

1. If the velocity of money is 2 purchases per year and the quantity of money is $50 worth of bills, what is nominal GDP?

2. If the price-level goes from 1 to 1.5, how does real GDP change along the aggregate demand curve?

3. Suppose government stimulus increases the number of purchases people make, plot how the aggregate demand curve shifts.

4. Suppose the Federal Reserve diminishes the money supply, plot how the aggregate demand curve shifts.