PLEASE ONLY GIVE ANSWER, NO EXPLANATION. Have the answers with the question number and part like I provided, ex. 1a, 1b, 2a, 2b, etc.

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1. Problems and Applications Q1 Suppose that this year's money supply is $400 billion, nominal GDP is $12 trillion, and real GDP is $4 trillion. The price level is |:] , and the velocity of money is |:]. Suppose that velocity is constant and the economy's output of goods and services rises by 3 percent each year. Use this information to answer the questions that follow. If the Fed keeps the money supply constant, the price level will V , and nominal GDP will V . True or False: If the Fed wants to keep the price level stable instead, it should decrease the money supply by 3% next year. 0 True 0 False If the Fed wants an inflation rate of 12 percent instead, it should V the money supply by . (Hint: The quantity equation can be rewritten as the following percentage change formula: (Percentage Change in M) + (Percentage Change in V) 2 (Percentage Change in P) + (Percentage Change in Y).) 1. Problems and Applications Q1 Suppose that this year's money supply is $400 billion, nominal GDP is $12 trillion, and real GDP is $4 trillion. The price level is |:] , and the velocity of money is |:]. Suppose that velocity is constant and the economy's output of goods and services rises by 3 percent each year. Use this information to answer the questions that follow. If the Fed keeps the money supply constant, the price level will True or False: If the Fed wants to keep the price level stable ins 0 True 0 False If the Fed wants an inflation rate of 12 percent instead, it should be rewritten as the following percentage change formula: fall by 3% V , and nominal GDP will stay the same rise by 3% V the money supply by \"/0 (Percentage Change in M) + (Percentage Change in V) 2 (Percentage Change in P) + (Percentage Change in Y).) crease the money supply by 3% next year. . (Hint: The quantity equation can 1. Problems and Applications Q1 Suppose that this year's money supply is $400 billion, nominal GDP is $12 trillion, and real GDP is $4 trillion. The price level is |:] , and the velocity of money is |:]. Suppose that velocity is constant and the economy's output of goods and services rises by 3 percent each year. Use this information to answer the questions that folio w. If the Fed keeps the money supply constant, the price level will V , and nominal GDP will ' 0 True or False: If the Fed wants to keep the price level stable instead, it should decrease the money supply b rise by 9 A fall by 3% 0 True fall by 9% 0 False stay the same If the Fed wants an inflation rate of 12 percent instead, it should V the money supply by rise by 3% be rewritten as the following percentage change formula: (Percentage Change in M) + (Percentage Change in V) 2 (Percentage Change in P) + (Percentage Change in Y).) he quantity equation can 1. Problems and Applications Q1 Suppose that this year's money supply is $400 billion, nominal GDP is $12 trillion, and real GDP is $4 trillion. The price level is |:] , and the velocity of money is |:]. Suppose that velocity is constant and the economy's output of goods and services rises by 3 percent each year. Use this information to answer the questions that follow. If the Fed keeps the money supply constant, the price level will V , and nominal GDP will V . True or False: If the Fed wants to keep the price level stable instead, it should decrease the money supply by 3% next year. 0 True 0 False If the Fed wants an inflation rate of 12 percent instead, it should V the money supply by . (Hint: The quantity equation can be rewritten as the following percentage change formula: (Percentage Change in M) + (Percentage Change in V) 2 (Percentage Change in P) + (Percentage Change in Y).) 2. Problems and Applications Q2 Suppose that changes in bank regulations reduce the availability of credit cards so that people need to hold more cash. Show how this event affects the demand for money. Demand Supply Value of Money ('l/P) _____________+ Demand Quantity of Money If the Fed does not respond to this event, the price level will V . True or False: If the Fed wants to keep the price level stable, it should increase the money supply. O True 0 False If the Fed does not respond to this event, the price level will V . remain unchanged True or False: If the Fed wants to keep the price level stable, - money supply. increase O True decrease 0 False 3. Problems and Applications Q3 It is sometimes suggested that the Federal Reserve should try to achieve zero inflation. Assume that velocity is constant. True or False: In order to achieve this zero-inflation goal, the rate of money growth must equal the growth rate of output. 0 True 0 False 4. Problems and Applications Q4 Suppose that a country's inflation rate increases sharply. As a result, the inflation tax on holders of money V . True or False: Wealth in savings accounts is not subject to a change in the inflation tax because the real interest rate will increase with the rise in inflation. 0 True 0 False 4. Problems and Applications Q4 Suppose that a country's inflation rate increases sharply. As a result, the inflation tax on holders of money V . decreases True or False: Wealth in savings accounts is not 5 ange in the inflation tax because the real interest rate will increase with the rise in inflation. increases 0 True 0 False 5. Problems and Applications Q5 Consider the effects of inflation in an economy composed of only two people: Lorenzo, a bean farmer, and Neha, a rice farmer. Lorenzo and Neha both always consume equal amounts of rice and beans. In 2019 the price of beans was $3, and the price of rice was $1. Suppose that in 2020 the price of beans was $6 and the price of rice was $2. Inflation was :] . Indicate whether Lorenzo and Neha were better off, worse off, or unaffected by the changes in prices. Better Off Worse Off Unaffected Lorenzo O O O Neha O O O Now suppose that in 2020 the price of beans was $4.80 and the price of rice was $2. In this case, inflation was |:l . Indicate whether Lorenzo and Neha were better off, worse off, or unaffected by the changes in prices. Better Off Worse Off Unaffected Lorenzo O O O Neha O O Q Now suppose that in 2020 the price of beans was $4.80 and the price of rice was $2. In this case, inflation was "/0 . Indicate whether Lorenzo and Neha were better off, worse off, or unaffected by the changes in prices. Better Off Worse Off Unaffected Lorenzo O O O Neha O O O Indicate whether Lorenzo and Neha were better off, worse off, or unaffected by the changes in prices. Better Off Worse Off Unaffected O O Now suppose that in 2020, the price of beans was $1.20 and the price of rice was $2. In this case, inflation was \"/0 . Indicate whether Lorenzo and Neha were better off, worse off, or unaffected by the changes in prices. Better Off Worse Off Unaffected What matters more to Lorenzo and Neha? O The relative price of rice and beans O The overall inflation rate 6. Problems and Applications Q6 Suppose the tax rate is 30%. For each of the ination rate and before-tax nominal interest rate combinations, complete the following table by computing the before-tax real interest rate, the aftertax nominal interest rate, and the aftertax real interest rate. Inflation Rate Before Tax After Tax (Percent) Nominal Interest Rate Real Interest Rate Nominal Interest Rate Real Interest Rate (Percent) (Percent) (Percent) (Percent) s s |:] 2 e :1 7. Problems and Applications Q7 Money serves three functions in the economy: medium of exchange, unit of account, and store of value. Which of the following statements describes how inflation affects the ability of money to serve as a store of value? Check all that apply. C] In some countries with hyperinflation, prices are posted in terms of U.S. dollars rather than the local currency, even though the local currency is still used to purchase the good. C] Inflation erodes money's purchasing power. C] Inflation causes menu costs. 8. Problems and Applications Q8 Suppose that people expect inflation to equal 3 percent, but in fact, prices rise by 5 percent. Indicate whether this unexpectedly high ination rate helps or hurts each of the foflowing groups or individuals. Helps Hurts The government O O A homeowner with a fixed-rate mortgage O O A union worker in the second year of a labor contract 0 O A college that has invested some of its endowment in government bonds that are not indexed Treasury bonds 0 O 9. Problems and Applications Q9 True or False: Inflation does not reduce the purchasing power of most workers. O True 0 False