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Using The Following Instructions, Perform Accuracy Check of Lecture Slide
Using The Following Instructions, Perform Accuracy Check of Lecture Slide
All the computations or formulae which are mentioned in lecture slides are accurate.
4.
Any examples which exists in lecture slides are relevant and correct.
5.
Any typos.
6. Slideshow of lecture slide is running and entire content is visible (nothing getting blocked in
slideshow). No alignment issues in slideshow.
7.
Question 3: If there are 100 transactions in a year and the average value of each transaction is
$10, then if there is $200 of money in the economy, transactions velocity is ______ times per
year.
A) 0.2 B) 2 C) 5 D) 10
SolutionC) 5
M*V = P*T, 200*V = 10*100, V = 5
Question 4: If the average price of goods and services in the economy equals $10 and the
quantity of money in the economy equals $200,000, then real balances in the economy equal:
A) 10. B) 20,000. C) 200,000. D) 2,000,000.
SolutionB) 20,000
$200,000 / $10= $20,000
Question 5:
According to the quantity theory of money, if money is growing at a 10 percent rate and real
output is growing at a 3 percent rate, but velocity is growing at increasingly faster rates over
time as a result of financial innovation, the rate of inflation must be:
A) increasing. B) decreasing. C) 7 percent. D) constant.
SolutionA) Increasing
Question 6:
If the money supply increases 12 percent, velocity decreases 4 percent, and the price level
increases 5 percent, then the change in real GDP must be ______ percent.
A) 3 B) 4 C) 9 D) 11
SolutionA) 3
M/M+V/V=P/P+Y/Y, 12-4=5++Y/Y, Y/Y=3
Question 7:
Percentage change in P is approximately equal to the percentage change in:
A)
M.
B)
C)
D)
D)
decrease by 1 percent.
Question 10:
According to the quantity theory a 5 percent increase in money growth increases inflation by ___
percent. According to the Fisher equation a 5 percent increase in the rate of inflation increases
the nominal interest rate by _____.
A) 1; 5 B) 5; 1 C) 1; 1 D) 5; 5
SolutionD) 5; 5