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Posted: June 15th, 2022
Use the equation of exchange, calculate the value of real output
Use the equation of exchange, calculate the value of real output (Q), or real transactions (T) in an economy where M=$200 billion, V=2.4 and P=1.2?If the value of full employment output (Q) or real transactions (T) in the economy above is $451 billion, calculate the change in the money supply (M) needed by the Fed to bring this economy to full employment output if V=2.5 during the economic booms. Assume that there is no increase in the price level when the economy reaches full employment.
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