What is the equation of exchange? Suppose that real GDP and velocity are constant. In this case, what effect will an increase in the quantity of money have?
What will be an ideal response?
The equation of exchange is that M × V = P × Y, where M is the quantity of money, V is the velocity of circulation, P is the price level, and Y is real GDP. If real GDP and velocity are constant, then an increase in the quantity of money will increase the price level.
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Wilbur's Bean Emporium serves barbeque sandwiches over the lunch hour. The marginal cost of t he 50th barbeque sandwich is $1.50. The average total cost of the 49th sandwich is $1.75. For Wilbur's Bean Emporium, __________ when output is 50 sandwiches.
Fill in the blank(s) with the appropriate word(s).
An economic model suggests that for every additional year of education, the future wages increase by 5 percent
If Richard, with 12 years of education, earns $20 per hour, how much will he earn per hour if he decides to undertake four additional years of education?