Suppose Y = 100, P = 80, and V = 3.2. If Y rises to 105, and the inflation rate is 10 percent, what is the new value of M?
What will be an ideal response?
105 × 88 = 9,240 = M × 3.2. M = 2,887.5. Equivalently, 100 × 80 = M × 3.2, so M = 2,500. Since P × Y rises from 8,000 to 9,240, an increase of 15.5%, M must rise by 15.5% = 2,500 × 1.155 = 2,887.5
Economics
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The advantages of a currency union may extend to political relationships, too. How?
A) Currency unions, unfortunately, create political dissension. B) Currency unions can be used by the larger nations to grab political power. C) Currency unions reduce each nation's individual political power. D) Currency unions enhance each nation's identification with other nations in the currency union.
Economics
In the figure above, what is the equilibrium price and quantity?
What will be an ideal response?
Economics