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Business, 19.03.2021 18:20 treaustin6978

1A.) Assume a simple economy where only burgers are traded. In a year, 100 burgers are traded at the rate of $5 per burger. Assume two scenarios: a. The economy has $100 in the form of 20 pieces of $5 bills.

b. The economy has $100 in the form of 100 pieces of $1 bills.

Calculate the velocity of money for both situations.

1B.) For a country A, the GDP growth rate is 8 percent and inflation is 4 percent. If the velocity of money remains constant, what is the change in real money balances?

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