During the Civil War, both the Union (the northern states) a…
During the Civil War, both the Union (the northern states) and the Confederacy (the southern states) financed their spending through printing money. The Confederacy increased the money supply (M) by 1,900% between 1861-1865. The price level (P) increased by 9,200% during the same period. The Real GDP (Y) stayed roughly the same. This means that velocity (V) increased sharply during this time. Which of the following statements best explains why there was such a sharp increase in velocity
Read Details“Buy now, pay later” applications (Klarna, Afterpay, Quadpay…
“Buy now, pay later” applications (Klarna, Afterpay, Quadpay, etc.) allow one to make a purchase now while making equal payments over a predetermined period of time with no interest as long as payments are made on time. What do you think this might have on the velocity of money?
Read DetailsUse the following information for question 1-4. Assume the r…
Use the following information for question 1-4. Assume the required reserve rate is 8%. Total deposits in the banking system are $500 billion Currency in circulation is $100 billion. Total reserves in the banking system are $60 billion $20 billion excess reserves in the banking system Calculate the money supply
Read DetailsUse the following information for question 1-4. Assume the r…
Use the following information for question 1-4. Assume the required reserve rate is 8%. Total deposits in the banking system are $500 billion Currency in circulation is $100 billion. Total reserves in the banking system are $60 billion $20 billion excess reserves in the banking system Calculate the advanced money multiplier. Hint: Use your answers in the previous two questions in your calculation
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