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Sagot :
The price level increases 5 percent, then the change in real GDP must be 3 percent.
Evaluation :
If the cash supply increases 12 percent, velocity decreases 4 percent, and therefore the price level increases 5 percent, then the change in real GDP must be three percent.change in M + change in V= change in P + change in Y = 12-4= 5 +change in Y
Y = 8 - 5
Y = 3
What is Gross Domestic Product ?
The term "Gross Domestic Product," or GDP, refers to the entire monetary worth of all finished goods and services produced (and marketed) within a nation within a specific time period (typically 1 year). Purpose. the foremost often used indicator of economic activity is the GDP.The quantity of all commodities and services produced is multiplied by their prices, and therefore the resulting amount is used to calculate GDP.
How to calculate GDP ?
GDP are often calculated using either the total amount of goods and services purchased or the amount of production. Consumption, investment, government, exports, and imports are the various categories of demand.Accordingly, GDP is defined by the subsequent formula:
GDP = Consumption + Investment + Government Spending + Net Exports or
more succinctly as : GDP = C + I + G + NX
Learn more about Gross Domestic Product:
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