25. The table provides some data for the United States in the first decade following the Civil War. Quantity of money Real GDP (1929 dollars) Price level (1929 = 100) Velocity of circulation 1869 $1.3 billion $7.4 billion X 4.50 1879 $1.7 billion. Z 54 4.61 Source of data: Milton Friedman and Anna J. Schwartz, A Monetary History of the United States 1867-1960. a. Calculate the value of X in 1869. b. Calculate the value of Z in 1879. c. Are the data consistent with the quantity theory of money? Explain your answer.
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- 1. Differentiate between real flows and monetary flow. 2.Briefly describe the concept extrapolation.Which of the following reduces the interest rate? a. a decrease in government expenditures and a decrease in the money supply b. an increase in government expenditures and an increase in the money supply c. an increase in government expenditures and a decrease in the money supply d. a decrease in government expenditures and an increase in the money supplyQuestion 1 a. Increasing prices erode the purchasing power of the dollar. It is interesting to compute what goods would have cost at some point in the past after adjusting for inflation. Go to the Federal Reserve Bank of St. Louis, FRED database website at https://research.stlouisfed.org/fred2/and find the consumer price index for all urban consumers. What would a car that cost $25,000 today have cost the year 1996? b. Many countries have central banks that are responsible for their nation’s monetary policy. Go to www.bis.org/cbanks.htm and select one of the central banks (for example, ECB, Norway). Review that bank’s Web site to determine its policies regarding application of monetary policy. How does this bank’s policies compare to those of the U.S. central bank?
- Discuss the concept of "monetary policy". Explain the types of monetary policies and the means to affect them.2. Show that the study of Islamic macroeconomics intersects with the Islamic economic system! 3. Ibn Khaldun stated: "the wealth of a country is not determined by the amount of money it has. But it is determined by how much the country's ability to produce goods and services and the efficiency of the country in producing it" Explain the meaning of this statement and how should the monetary authorities react to it?Why do economists insist on emphasizing the difference between money and income? Why is this difference important in macroeconomics?
- In an economy where the central bank implements negative interest rates as a monetary policy tool, what is the most likely short-term impact on consumer savings behavior and bank profitability? A. An increase in consumer savings as people seek to safeguard their money and a rise in bank profitability due to increased lending. B. A decrease in consumer savings as the incentive to save diminishes and a decrease in bank profitability due to lower interest margins. C. No significant change in consumer savings behavior but an improvement in bank profitability due to lower borrowing costs. D. A shift in consumer investment towards riskier assets and challenges in bank profitability due to compressed interest margins. Please don't use chatgpt it is giving wrong answer and please provide valuable answer2.Which of the following is an example of monetary policy? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a A change in taxes b A change in the money supply c A change in the interest rate d A change in the price levelQuestion 4Suppose a country’s inflation level is higher than desired, and unemployment levels arelower than expected – the central bank decides that the economy is ‘overheated’ andattempts to use the appropriate monetary policy to deal with the situation. Describe,with the help of the appropriate figure, how a central bank might go about implementingsuch monetary policy, the subsequent effects this has on interest rates, the quantity ofmoney in the market, and the process through which this affects the level of expenditurein the economy.
- QUESTION 3We asked five students to give us three possible sources of an increase of the monetary base in the economy. Only one of the students came up with a completely correct list. This list included: an increase in central bank lending to banks, a purchase of government bonds by the central bank, a purchase of foreign currency by the central bank. an increase in central bank lending to banks, a sale of government bonds by the central bank, a sale of foreign currency by the central bank. a decrease in central bank lending to banks, a purchase of government bonds by the central bank, a purchase of foreign currency by the central bank an increase in central bank lending to banks, an increase in bank lending to firms and households, a purchase of government bonds by the central bank4. Why did inflation targets replace monetary targets as the most widely used strategy for monetary policy in advanced economies?3. The classical dichotomy and the neutrality of money The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction. Poornima spends all of her money on magazines and donuts. In 2015, she earned $27.00 per hour, the price of a magazine was $9.00, and the price of a donut was $3.00. Which of the following give the nominal value of a variable? Check all that apply. O The price of a donut is $3.00 in 2015. O Poornima's wage is $27.00 per hour in 2015. O The price of a donut is 0.33 magazines in 2015. Which of the following give the real value of a variable? Check all that apply. O The price of a magazine is 3 donuts in 2015. O Poornima's wage is 9 donuts per hour in 2015. O The price of a magazine is $9.00 in 2015. Suppose that the Fed sharply increases the money supply between 2015 and 2020. In 2020, Poornima's wage has risen to $54.00 per hour. The price of a magazine is $18.00 and the price of a donut is…