All categories

2 years ago

How might an economist gather empirical data to test the proposed relationship between money and the price level?

2 answers:

6 0

The quantity theory of money says that:
M V = P Y
where M is money supply, V is income velocity of money, P is price level and Y is income level.
Using the analyze of the empirical data, we can say that there is a long-run association between money and price.

Vikentia [17]2 years ago

6 0

An economist gather empirical data to test the proposed relationship between money and the price level by gathering data on past changes in the money supply and note the resulting changes in the price level.

<h3>Further explanation </h3>

Economists cannot study complex relationships using data because they are unlike the researchers in the hard sciences that can run a controlled laboratory experiment for the generation of data to test the theories and relevant models. An economist would look for data on past changes in the money supply, and note the resulting changes in the price level

An economist can develop models and theories to provide a description of the world based on observed phenomena, because there is a close association between price and money.

Economists do not usually develop theoretical models of the economy but they only analyze the summary statistics about the current state of the economy. An economist would persuade the Federal Reserve to change the money supply to various levels, and also observe the resulting changes in the price level.

An economist supposed to believe that the price level in the economy is directly related to the money supply or the amount of money circulating in the economy. The following relationship is applied to that condition:

$P=A * M$ , where

P = Price Level

M = Money Supply

A = A composite of other factors including real GDP that change very slowly over time.

<h3 /><h3>Learn more</h3>

Learn more about relationship between money and the price level brainly.com/question/6696702

<h3>Answer details</h3>

Grade: 9

Subject: business

Chapter: relationship between money and the price level

Keywords: price level, money

You might be interested in

What is the name given to the development of a new good?

Rama09 [41]

An invention is the name given to the development of a new good.

<h3>What an invention?</h3>

Invention refers to the process of creating something that has never been made. It is a unique or novel device, method, composition or process.

An invention uses technology to solve a specific problem hence the name given to the development of a new good.

Examples of invention includes:

Manufacturing of Telephone.
Manufacturing of printing press.

Therefore, the name given to the development of a new good is called invention.

Learn more about invention here : brainly.com/question/23538626

4 0

1 year ago

LIFO uses the ______ unit costs for Cost of Goods Sold on the income statement and the ______ unit costs for Inventory on the ba

Tasya [4]

LIFO uses the last unit costs for Cost of Goods Sold on the income statement and the first unit costs for Inventory on the balance sheet.

LIFO means last in first out. It means that it is the last purchased inventory that is the first to be sold.

For example, if beginning inventory consists of 10 units at $10 per unit. In the middle of the month, 10 units were bought at $15 per unit. At the end of the month, 10 units were sold. Using LIFO, the cost of goods sold would be $150 ( 10 x 15). Ending inventory would be $100 ($10 x 10).

To learn more about LIFO, please check: brainly.com/question/13779572

3 0

1 year ago

Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned a total of 8,638. The

mina [271]

Answer:

Net Pay = Gross Pay - Federal Income Tax - FICA-SS Tax - FICA-Medicare Tax

Net Pay = $8,260.00 - $1,325.17- $512.12 - $119.77* = $6,302.94

Explanation:

4 0

2 years ago

Sally tends to procrastinate early in a project's development, but she always comes through when the pressure is on. for sally,

iragen [17]

Constructive stress. When stress produces results it is constructive.

7 0

2 years ago

In functions of business, what is an example of management?

love history [14]

The four primary functions of managers are planning, organizing, leading, and controlling. By using the four functions, managers work to increase the efficiency and effectiveness of their employees, processes, projects, and organizations as a whole.

4 0

2 years ago