Use the quantity theory of money to answer the following questions. We know that for 1994 this small nation had the following economic data: Ms = $200 billion, P = 3, and V = 2. (Assume output = income and GDP = P × Q.)
(a) What is income for 1994? What is nominal GDP?
(b) By how much would the money supply need to change if income were $400 billion?
(c) If annual GDP growth is 5%, by how much will the Ms need to change in 1995? (Use the GDP figure from Part (a).)

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The Answer of Use the quantity theory of money to answer the following questions. We know that for 1994 this small nation had the following economic data: Ms = $200 billion, P = 3, and V = 2. (Assume output = income and GDP = P × Q.)
(a) What is income for 1994? What is nominal GDP?
(b) By how much would the money supply need to change if income were $400 billion?
(c) If annual GDP growth is 5%, by how much will the Ms need to change in 1995? (Use the GDP figure from Part (a).)

Use the Quantity Theory of Money to Answer the Following