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Vedmedyk [2.9K]
2 years ago
7

The money demand function for an economy is given by (M/P)d = (0.6Y)/(i1/2). If output is 1,000 units, the nominal interest rate

is 9%, and the money supply is $1,200, the price level is _____.
Business
1 answer:
DIA [1.3K]2 years ago
6 0

Answer:

$0.6

Explanation:

Nominal interest rate (i) = 9% = 0.09

Output (Y) = 1,000

Money supply(M) = 1,200

==> (M/P)^d = (0.6Y) / i^(1/2)

==> 1200/P = 0.6*1000 / 0.09^(1/2)

==> 1200/P = 600 / 0.3

==> 1200/P = 2000

==> 1200 = 2000 * P

==> P = 1200/2000

==> P = $0.6

Therefore, the price level is $0.6

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Suppose an economy’s national accounts are GNP = 100, C = 70, I = 40, G = 20 and EX = 20 where GNP is gross national product, C
Marysya12 [62]

Answer:

Imports is 50.

Current account balance is -30.

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Explanation:

GNP is given as  100.

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