Fisheria Is a Country in Which the Quantity Theory of Money

question 162

Essay

Fisheria is a country in which the quantity theory of money operates. The country has a constant population, cap stock, and technology. In 2008, real GDP was $300 million, the quantity of money was $60, and the velocity of cir of money was 10. In 2009, the price level rose by 20 percent.
a) What was the price level in 2008? (The price level is measured by the GDP deflator, which is 100 in 2000. So level from the equation of exchange needs to be multiplied by 100 to convert it to the GDP deflator.)
b) What was real GDP in 2009?
c) What was the velocity of circulation in 2009?
d) What was the quantity of money in 2009?

---

Definitions:

Duration

Duration refers to the length of time a particular event or condition lasts, measured from its beginning to its end.

Emotions

Complex psychological states that involve a subjective experience, a physiological response, and a behavioral or expressive response.

Reticular Activating System

A network of neurons located in the brainstem that is responsible for regulating wakefulness and sleep-wake transitions.

Beta Wave Activity

refers to the brain wave patterns associated with active, alert, and waking states of consciousness, characterized by a higher frequency of neural oscillations.