What is the assumption of constant velocity in the long-run implied in the model of quantity...

What is the assumption of constant velocity in the long-run implied in the model of quantity theory of money? Explain.

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Rahul Sunny answered 2 years ago

1.According to the quantity equation, if velocity is constant at 2 and real GDP is constant...

1.According to the quantity equation, if velocity is constant at 2 and real GDP is constant at 6000, then, if the money supply is increased from 4500 to 6000, the price level: A. increases to 1.33 B. increases to 1.5 C. increases to 2 D. is constant at 1.5 2. If inflation does not adjust rapidly in the short run, then when the Reserve Bank increases the nominal interest rate, in the short run the real interest rate will: A....

Part 1: Consider the Gordon model of constant growth rate assumption. State briefly what this model...

Part 1: Consider the Gordon model of constant growth rate assumption. State briefly what this model says about the value of stocks. In 2018, Walmart paid $2.08 in dividends per share. The stock traded for about $96 per share towards the end of the year. Find out a set of inputs to the Gordon growth model (e.g., the assumed growth rate g and the required rate of return r, that make the intrinsic value of the stock equal to the...

The endogenous growth predicted by the AK model is due to the assumption of a constant...

The endogenous growth predicted by the AK model is due to the assumption of a constant marginal product of capital, true or false? (diagram + econ theories)

Which of the following is NOT an assumption of the traditional economic order quantity (EOQ) model?...

Which of the following is NOT an assumption of the traditional economic order quantity (EOQ) model? a. Holding and ordering costs are stable and known. b. Demand is constant and known. c. Supply lead time is constant and known. d. Quantity discounts are possible. Kim’s Nail Salon uses a weighted moving average method to forecast demand. She assigns a weight of 5 to the previous month’s demand, 3 to demand two months ago, and 2 to demand three months ago....

1. According to the quantity theory of money, if velocity of money is constant, a 5...

1. According to the quantity theory of money, if velocity of money is constant, a 5 percent increase in money supply will lead to a 0.25 percent increase in nominal GDP. a. True b. False 2. According to the equation of exchange, if the amount of money in an economy multiplied by the velocity of money equals 800 million dollars, then this economy's: a. nominal GDP equals $800 million. b. nominal GDP equals $800 million times the price level. c....

The constant velocity of money in the quantity equation implies that any increase in the money...

The constant velocity of money in the quantity equation implies that any increase in the money supply has to lead directly to: Multiple Choice an increase in Y. an increase in V. an increase in P. a decrease in P. The severe oil shortages of the 1970s in the US created: Multiple Choice an increase in the velocity of money. demand pull inflation. a recession. cost push inflation. A financial bubble starts to inflate when: Multiple Choice a good experiences...

We have noted that the classical dichotomy assumption holds in the long run but not in...

We have noted that the classical dichotomy assumption holds in the long run but not in the short run. a. Briefly describe 3 reasons why the classical dichotomy would not hold in the short-run b. If we assume that the classical dichotomy holds in the short run as well, what effect would changes in the nominal interest rate have on the real economy?

The quantity theory of money and prices assumes velocity is constant. the price level is increasing...

The quantity theory of money and prices assumes velocity is constant. the price level is increasing at a constant rate. the price level is constant. real national output is constant. The number of times per year that a dollar is spent on final goods and services defines the income velocity of money. the price index. the money supply. GDP. From the late 1980s to the present, the natural rate of unemployment has held constant. climbed sharply. gradually declined. fluctuated up...

Discuss whether it is an acceptable assumption to view the long-run Phillips curve as a straight...

Discuss whether it is an acceptable assumption to view the long-run Phillips curve as a straight vertical line at society’s “natural” rate of unemployment.

In the long run is the German model a good one?

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