1. If nominal GDP is $18,600 and the money supply is $6,000 million, then the velocity of money is equal to?
2. According to the equation of exchange, if the money supply is $600 million, real GDP is $2,100 million, and the nominal GDP is $3,600 million, then the velocity of money is equal to?
3. Assume a reverse requirement of 25 percent. If a bank has zero excess reserves and $ 100,000 in total cash reserves, then its deposits must equal?
4. If a bank has cash holding of $2.5 million in its vault and $7 million as reserves in the FED, what are its legal reserves?
5. Assume that a Spanish investor deposits 1,000 Euros in an American time deposit denominated in dollars. The exchange rate is then a Euro(symbol) 1= $1. After two months the investor cashes in the dollar deposit and obtains only 800 Euros. What must the new exchange rate be at the time of withdrawal? (Interest Earnings are Zero)
6. For a hypothetical economy, the MPS is 0.08 and the MPI is 0.17. Calculate the spending multiply.
7. If a bank's required reserves equal $ 270,000, no excess reserves are held, the reserve requirement is equal to 18 percent, what is the values of the banks total deposits.
8. Assume, a reserve requirement of 25 percent. If a bank has zero excess reserves and 400,000 in total cash reserves, then its deposits must equal.
9. In Figure above, the increase in the interest rate from i1 to i2 could have been caused by?
10. To monetarist, a short run increase in the money supply would increase equilibrium real GDP then the side effect of this will be?

Solve for the Quantity of Money.

Example MV= PYr

(25,000) (2)= (100) (500)

50,000= 50,000

1.

Year M V= P Yr/Q

1 25,000 2 100 500

2 4 100 500

3 4 100 400

4 4 100 200

5 2 100 400

6 1 100 600

2.Solve for the Quantity of Money.

Year M V= P Yr/Q

1 2 50 150

2 4 50 150

3 5 50 100

4 2 50 200

Fill in the blanks

I Epi requil

5% 2% 3%

5% 1%

5% 8%

10% 2%

6% 2%

0% -2%

I E pi requil

11 -4

14 9

-7 4

1.Solve for the tax multiplier(*Convert into decimal)B.If government spending increases by$754,what is the level of real GDP?

MPS=63%

MPI=27%

2.Consumer saves45%of additional income,spends45%on domestic goods and services and35%on imports.Solve for the tax multiplier(*Convert into decimal)

3.Employed=178

Unemployed=74

Adult Population=450

Children under the age of16=45

A.Find the Labor Force

B.Calculate the Labor Force Participation Rate

C.Compute the Unemployment Rate