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QTM Assignment

The document is an assessment for a 6th Form Economics class focusing on the Quantity Theory of Money. It includes tasks that require independent learning and problem-solving related to money supply, velocity, and inflation. Students are instructed to answer questions in their own words based on provided materials.

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Dellon-Dale Bennett
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2 views1 page

QTM Assignment

The document is an assessment for a 6th Form Economics class focusing on the Quantity Theory of Money. It includes tasks that require independent learning and problem-solving related to money supply, velocity, and inflation. Students are instructed to answer questions in their own words based on provided materials.

Uploaded by

Dellon-Dale Bennett
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Dellon-Dale Bennett (BSc, L.L.

B) Charlemont High School

Assessment

Subject: Economics 6th Form


Date: November 22, 2021
Main Focus: Quantity Theory of Money
Assessment:

General Instructions: ALL ANSWER SHOULD BE WRITTEN IN YOUR


NOTEBOOKS AND IN YOUR OWN WORDS.
Tasks One:

You are to do independent learning from via the material posted in the GC and answer
the following questions.

1. 1. Use the quantity equation for this problem. Suppose the money supply is
€200, real output is 1,000 units, and the price per unit of output is €1.

a. What is the value of velocity? (2 marks)

b. If velocity is fixed at the value you solved for in part (a), what does the
quantity theory of money suggest will happen if the money supply is
increased to €400? (4 marks)

c. When inflation gets very high, people do not like to hold money because it
is losing value quickly. Therefore, they spend it faster. If, when the money
supply is doubled, people spend money more quickly, what happens to
prices? Do prices more than double, less than double, or exactly double?
Why? (4 marks)

Task Two:

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