KEYExercise: Unit VI NameLab Dav/TimeLab Instructor1. According to the monetarist view of the Quantrty Theory ofMoney (Mt V: P q), what wouldhappen to the general price level @) if the money supply (Ms) was increasing less rapidly than realoutput (q) was increasing?S p e.t {iL r.arnb',l52 ek , (Pt tect dt aqnuts urt O L ,2 Keynesians believe that a given change in the money supply will result in a smaller decline ininterest rates than do the monetarists. Use a money supply/money demand diagram for theKeynesian vrew and a money supply/money demand diagram for the monetarist view to illustratethe Keynesian contention. iilA of tulle-64-3. In Figures VI-l and VI-2,know?I'{PC = o,8what is the marginal propensity to consume (MPCX How do youI: Ar xy,euJj 3 = LO{&w,, { lotArAsrhce A yrvvo wel-ar r,SlIGyr1w&n* 11/rC e. o.8Yxinvestment spending and the level of national income. Use money market, investment market, andlrnM" ASrcLoNLi\Is,a|IfiltI p(, MDM s[seZ pk, AIt* br r ndATy
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