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If Velocity Is 6, Real Output Is 10,000, and M

question 22

Essay

If velocity is 6, real output is 10,000, and M is 20,000 what would the price level be? If M increases to 25,000 but V and Y do not change, what happens to the price level? Are the change in the money supply and the change in the price level proportional?


Definitions:

General Fund

The principal fund of a governmental entity, covering most basic operational activities and services.

Deferral Method

An accounting practice where revenue or expenses are recognized at a date later than when they were initially incurred, often applied to revenue received in advance or prepayments of expenses.

Pledge

A commitment or security for the payment of a debt, performance of an action, or purchase of a good.

Estate

The total value of all the assets owned by an individual at the time of their death, including property, cash, and investments, minus any liabilities.

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