ECO403 ASSIGNMENT NO. 1 SPRING 2023 (PART-D) || 100% RIGHT SOLUTION || MACROECONOMICS || BY VuTech
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The Case:
PART-D
Complete the missing value by using the information given in the table
Years | Output (Y) | Price (P) | Velocity (V) | Money supply |
2019 | 3500 | 10 | 7 | ? |
2020 | 7000 | 12 | 6 | ? |
Solution
To calculate the missing values for money supply in 2019 and 2020, we can use the equation of the quantity theory of money:
Money Supply = Output (Y) * Price (P) * Velocity (V)
Using the given data, we can calculate the money supply for each year:
For 2019:
Money Supply = 3500 * 10 * 7
= 245,000
For 2020:
Money Supply = 7000 * 12 * 6
= 504,000
Therefore, the money supply for 2019 is 245,000, and for 2020, it is 504,000.