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Essay

The Constant Velocity of Money

Essay specific features

 

Issue:

Business

 

Written by:

Polly T

 

Date added:

December 4, 2012

 

Level:

University

 

Grade:

B

 

No of pages / words:

3 / 704

 

Was viewed:

802 times

 

Rating of current essay:

 
Essay content:

Therefore, a percent change in the money supply added to a percent change in the velocity is equal to a percent change in nominal output. ( ). In order to make calculations easier it is often assumed that the velocity of money is constant. If this is true, any changes in the money supply would directly and proportionately change nominal GDP...
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If the economy is at full employment it can further be assumed that real output is fixed. Therefore any change in the money supply will subsequently change the price level. Unfortunately real output is not fixed, and even at full employment, will fluctuate with the business cycles. To test the constancy of velocity I compiled data on nominal GDP and the money supply for the last forty years...
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General issues of this essay:
CHANGES IN THE VALUE OF MONEY China Moves To Tighten The Money Supply Federal Reserve Bank Changing Money Supply Federal Reserve and Money Supply how does the federal reserve control the money supply? Money Supply Relationship between the money supply and nominal GDP The Constant Velocity of Money Money There Must Be More Money Saving Money American Culture: Money! Money! Money! Money Some people think that governments should spend large amounts of money to explore outer space. Others think that this money should be used to improve life on earth saving money
 

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