Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Need help answering questions 17-20 (Last two images) All the information needed is provided in the prior screenshots.I also provided how my professor told me
Need help answering questions 17-20 (Last two images) All the information needed is provided in the prior screenshots.I also provided how my professor told me to solve this question.
Introduction This assignment extends Assignment 1, Part C-2. At the end of that assignment, there were 200,000 coins in circulation in the Seven Kingdoms of Westeros: 110,000 debased Lannister- minted dragon coins, each of which contained 7/10.2 = 0.686 Troy ounces of silver, and 20,000 government-minted stags, each of which contained 7/12.5 = 0.56 Troy ounces of silver. (The original, undebased dragon coins were no longer in circulation.) Both types of coins had a denomination of seven stars, so the money supply of the Seven Kingdoms was 1.4 million stars. (Both types were legal tender for seven stars, and they traded for each other by tale.) The price of bread was 3/5 (0.6) stars per loaf. Raw (uncoined) silver still could be traded for bread, or vice-versa, at a rate of 14 loaves per Troy ounce. And it remained true that a Troy ounce of coined silver could be traded for 17 loaves of bread, as an alternative to using the coins as money. So a single loaf of bread traded for 1/17 = 0.0588 Troy ounces of coined silver. It also remained true that 14 million loaves of bread were produced, in the Seven Kingdoms, each year, and that the final-goods velocity of the coins was & times per year. Seven years after the revolution, King Robert was killed in a hunting accident. A war then broke out between the government of the Seven Kingdoms, under the new King Joffrey Baratheon, and forces led by Stannis Baratheon, Robert's younger brother. Stannis claimed the throne, asserting that the hunting accident had not really been an accident, and that Joffrey was not really Robert's son. (His mother was the dowager Queen Cersei, Tywin Lannister's daughter.) The government of King Joffrey turned to Master of Coin Littlefinger to raise funds for the war effort. He decided to raise some of the funds by minting additional stag coins. His first step was to restore the mint price for silver to 10% stars per Troy ounce, keeping the silver mint equivalent at 12 stars per Troy ounce. At this price, the public sold another 42,000 Troy ounces of silver to the mint. After that, the mint price was reduced back to 7 stars per Troy ounce. As the public watched the new coins being minted, there was a bit of upward pressure on the price of bread, which briefly exceeded 0.6 stars/loaf. In the end, however, the bread price settled back to 0.6 stars per loaf. Question 7 2 pts [33-a] According to the quantity theory, what must the money supply now have been, in stars? Note: Answer in stars, not millions of stars. Even though that will mean typing out a lot of Os. 1.4 It also remained true that 14 million loaves of bread were produced, in the Seven Kingdoms, each year, and that the final-goods velocity of the coins was 6 times per year. Seven years after the revolution, King Robert was killed in a hunting accident. A war then broke out between the government of the Seven Kingdoms, under the new King Joffrey Baratheon, and forces led by Stannis Baratheon, Robert's younger brother. Stannis claimed the throne, asserting that the hunting accident had not really been an accident, and that Joffrey was not really Robert's son. (His mother was the dowager Queen Cersei, Tywin Lannister's daughter.) The government of King Joffrey turned to Master of Coin Littlefinger to raise funds for the war effort. He decided to raise some of the funds by minting additional stag coins. His first step was to restore the mint price for silver to 10% stars per Troy ounce, keeping the silver mint equivalent at 12 stars per Troy ounce. At this price, the public sold another 42,000 Troy ounces of silver to the mint. After that, the mint price was reduced back to 7 stars per Troy ounce. For Question 17 (my 35-a) and the following: At this point in the story, there are two types of coins in circulation. For one type, a small increase in the price of bread would make that type of coin worth more, in trade, than it can buy as money. For the other type, it wouldn"t. How many of the first type of coins are still in circulation? A bunch of stags were minted, which increased the money supply. But if that causes the price of bread to rise a little, which causes some of the other coins to be withdrawn from circulation, what will the net increase in the money supply end up being? And what will the total money supply end up being? The suppression of Stannis' rebellion did not end the unrest in the Seven Kingdoms. King Joffrey quickly found himself involved in a war with House Stark. Littlefinger increased the silver mint price back to 10% stars/Toz., leaving the silver mint equivalent at 12% stars/Toz. Again, 42,000 Troy ounces of silver were sold to the mint, before the mint price was cut back to 7. This time, however, things didn't go quite as smoothly as they'd gone the first time. [ | Question 17 2 pts [35-a] If the price of bread rose, a little, what's the maximum number of additional coins that would be withdrawn from circulation? [35-b] If all those coins were withdrawn, Question 18 4 pts [35-b1] what would the net increase in the money supply be, in stars? [ > Question 19 3 pts [35-b2] what would the new money supply be, in stars? MNote: Again, answer in star, not in millions of stars. [ > | Question 20 [35-b3] what would the percentage increase in the money supply be? Round to the nearest tenth of a percentStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started