Question
I need help with this homework assignment. Please be elaborate in your answer, thanks. Question 1 .Suppose the Fed were required to conduct monetary policy
I need help with this homework assignment. Please be elaborate in your answer, thanks.
Question 1.Suppose the Fed were required to conduct monetary policy so as to hold the unemployment rate below 4%, the goal specified in the Humphrey-Hawkins Act. What implications would this have for the economy?
Question 2.Suppose we observed an economy in which changes in the money supply produce no changes whatever in nominal GDP. What could we conclude about velocity?
Question 3.Suppose price levels were falling 10% per day. How would this affect the demand for money? How would it affect velocity? What can you conclude about the role of velocity during periods of rapid price change?
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