question archive Scenario 3: The Monetary System and PolicySmall time deposits $1,100 billion Below represents the monetary system in the US: Demand deposits and other checkable deposits $800 billion Savings deposits $1,350 billion Money market mutual funds $900 billion Traveler's checks $30 billion Large time deposits $750 billion Currency $150 billion Miscellaneous categories in M2 $40 billion 4
Scenario 3: The Monetary System and PolicySmall time deposits $1,100 billion Below represents the monetary system in the US: Demand deposits and other checkable deposits $800 billion Savings deposits $1,350 billion Money market mutual funds $900 billion Traveler's checks $30 billion Large time deposits $750 billion Currency $150 billion Miscellaneous categories in M2 $40 billion 4
Subject:EconomicsPrice: Bought3
Scenario 3: The Monetary System and PolicySmall time deposits $1,100 billion
Below represents the monetary system in the US:
Demand deposits and other checkable deposits
$800 billion
Savings deposits
$1,350 billion
Money market mutual funds
$900 billion
Traveler's checks
$30 billion
Large time deposits
$750 billion
Currency
$150 billion
Miscellaneous categories in M2
$40 billion
4. From the value of M2 you found in question 1, assume that the price level is 100 and real output is valued at $218.5 billion. What is the current velocity of money?
I believe I answered this correctly. If I calculated answer 1. wrong I will update my answer.
Velocity = (P x Y) /M
100 x $218.5 / $5,120 = 4.26
5.Continuing from the previous question. The Federal Reserve is currently using the M2 money supply as a guide to help them in their policy goals. The Federal Reserve wants to promote a healthy economy. The Federal Reserve, in an attempt to improve the economy, injects $500 billion into the economy over the course of the year. During that same year, real output grew to $223.83 billion. Based on this, what is the new rate of inflation?
