Suppose that an economy is characterized by M = $9 trillion V = 1.6 P = base index = 1.0 Instructions: Enter your responses rounded to two decimal places (do not include a negative sign (-) with your answers). a. What is the real value of output (Q)? $ trillion Now assume that the Fed increases the money supply by 20 percent and velocity remains unchanged. b. If the price level remains constant, by how much will real output increase? $ trillion c. If, instead, real output is fixed at the natural level of unemployment (= Q from part a), by how much will prices increase in percentage terms? % d. By how much would V have to decrease to offset the increase in M (assuming Q and P did not change)?

Assume that the following conditions exist: a. all banks are fully loaned up- there are no excess reserves, and desired excess reserves are always zero. b. the money multiplier is 5 .     c. the planned investment schedule is such that at a 4 percent rate of interest, investment =$1450 billion. at 5 percent, investment is $1420 billion. d. the investment multiplier is 3 . e.. the initial equilibrium level of real gdp is $12 trillion. f. the equilibrium rate of interest is 4 percent now the fed engages in contractionary monetary policy. it sells $1 billion worth of bonds, which reduces the money supply, which in turn raises the market rate of interest by 1 percentage point. calculate the decrease in money supply after fed's sale of bonds: $nothing billion.

The cost of direct labor used in production is recorded as a? a. credit to work-in-process inventory account. b. credit to wages payable. c. credit to manufacturing overhead account. d. credit to wages expense.

Alinguist had a gross income of 53,350 last year. if 17.9% of his income got witheld for federal income tax, how much of the linguist's pay got witheld for federal income tax last year?