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    1. The document discusses how changes in real GDP and money supply affect nominal GDP and price level. It shows that if real GDP increases by 10%, nominal GDP will remain the same only if the price level also increases by 10%. 2. It provides an example where real GDP increases by 10% from 100 to 110. For nominal GDP to stay at 1000, the price level must increase from 10 to 11. 3. The document also discusses how an autonomous increase in money supply of 10% leads to a 10% increase in the price level to keep nominal GDP constant, since real GDP is assumed to remain unchanged.

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    1. The document discusses how changes in real GDP and money supply affect nominal GDP and price level. It shows that if real GDP increases by 10%, nominal GDP will remain the same only if the price level also increases by 10%. 2. It provides an example where real GDP increases by 10% from 100 to 110. For nominal GDP to stay at 1000, the price level must increase from 10 to 11. 3. The document also discusses how an autonomous increase in money supply of 10% leads to a 10% increase in the price level to keep nominal GDP constant, since real GDP is assumed to remain unchanged.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    21 views5 pages

    (A) PDF

    Uploaded by

    Atri Deb Chowdhury
    1. The document discusses how changes in real GDP and money supply affect nominal GDP and price level. It shows that if real GDP increases by 10%, nominal GDP will remain the same only if the price level also increases by 10%. 2. It provides an example where real GDP increases by 10% from 100 to 110. For nominal GDP to stay at 1000, the price level must increase from 10 to 11. 3. The document also discusses how an autonomous increase in money supply of 10% leads to a 10% increase in the price level to keep nominal GDP constant, since real GDP is assumed to remain unchanged.

    Copyright:

    © All Rights Reserved
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    of 5

    xaminati o Rll No-202010C6s

    Ren No 20201Oo GG/Yea- 2020


    Semeste-
    1pe Name- Tutrodustory Hae-roeconomies
    Tape Cod- £coro2c3
    Date 16/7/201

    Borvosnalendina u prdtbtted Tnb,eac studest cam ouly tmoest


    Sro 1e amd hee has baued up us, e bpply ds Baet
    CA be ioested.
    ed at Re 2000 fov ead studet
    Tnb, iall sdeats imoest all o Aer sasimae uto her ouon vespeciwe
    noe stmet pajecto, accordiug ts e vespeetiwe ates o etur aenr
    ater e l eac haee
    Shavm.. 2000 4 2000 x 5 2900
    100

    Sudavta. 2000+ 2ooo 2140

    Shana' 2000 2o0ox 15 200o


    RR 17, 1 D
    Change ta Kener ves 100
    m o v e tan AD. (A0 e)
    bak connat lban o c t
    Ne e 18
    4he addi {tonal vesevocs a s tt s leaaly reayired to akeep
    t b total depositts ab resevdes
    1o7., t sauld ust
    Even 4he bark Atd Loa out wove Ba
    e money cveatian multipliev
    .

    alfeet

    RR 7
    Resevv e D. D x CooOD O
    54 00 0
    p 15500 - Sh000
    Exceeb vesevee z
    2100
    Total netease 'm Homey upp Btsog(150g
    E50paK

    12.5 ?5000

    GD0e o
    Oe knes, fro 4Ae qaubiby Aatio
    HxV Pxy
    sheve, H-nautib mone
    H PxY V- Seloeb ont
    N
    P- Rtee dex
    Dfevetadn bott aides
    dH (PAY+ Y&P) [v a
    caatat gse
    Nad fo 3evo tlattn, AP 0
    dH PAY+ O)
    AH PAY
    SdH PAN) A.(
    Ihws at zevo laion, e ate o woey Aroust need mst be
    3e
    Tetnd, the pvice esel vemai ed ero uflutto),
    ae

    the aoaubity ehamge a

    ofmwoney shonla be efleeted the ehange t tab


    pi otput o 4e aal GNP

    Rate
    of Heney ousth Pice tudex (Rste al vovek Ral GDP)
    eloetby
    H 6Re5
    Nowival GbP R 300c
    Real GbP Rs. 200 e

    M
    oPxReal GDP
    H
    NonalGDP
    V 6o
    Noinal GDP Pxy VXH (Ruanttby eamati)
    Eoen Real, GDP dhauaes, ts ehauge s i be fsst bya chauge
    e price lesel, aud Aauiual GDP l reman sostat as V4 H
    ave constant
    No ehauge in Naminal GDP
    Tokeep e Noiua GDP enetot, te price leuel wwet L ecact
    he amovnt a t e Keal GDP ees

    Nauthal GDP . Pxy (y+ 1oy AP


    00

    YP-P)
    Pxf U (p-aP)
    P - AP: oP
    APP
    '. Pries Le oel l by
    4.0117 even yeav a
    T e þriee usd i to be kapt stade tew the hamge tn y has to be
    adieted fov im H: ub, H mwst albo vie by 107. eve eav
    'Money bupply
    TTJ mext qeav H+ H*10

    5 e)x (
    z5-5e
    Nos, prite level ncveases by 12.

    vxHP( )
    H-) )
    Nominal GDP122

    00e1R32
    CO 1000
    23R) * Sev

    4) C 50+0-2 Ya
    T 0
    G 200
    TR 10o
    tO22
    C 5 o + 0-B(Y+ TR -LY
    50+0.4(Y+ 100- 0-2y)
    50+08 (o6Y +1oo)
    10+ OGLY
    A Etubvium
    AS AD
    Y C+ T+C
    Y 130 O-GuY+ 90 4 200

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