1. What is velocity if GDP = $8 trillion and M2 = $2 trillion?

2. Given the following figures:
currency: $200
checking accounts: $800
savings accounts: $3000
value of stocks and bonds: $56,000

a. M1=
b. M2=

3. If the reserve requirement is 10%, what would be the impact of $2 million open market purchase?

4. If lenders require a 4% real rate of return, what would the nominal interest rate be if the expected inflation rate is 5%?

5. Given these levels of spending
C = 500
I = 100
G = 100
Ex = 10
Im = 11

a. what is GDP?
b. Is there a trade deficit or surplus?

6. If the money supply is $2 trillion and velocity = 4, What is nominal GDP?

7. If the MPC = 2/3, what is the multiplier?

8. Use the following model to determine short run National Income

C = 10 + 7/8 Y
I = 20
G = 15
Ex = 3
Im = 4

Equilibrium Income = ?

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