Suppose the money supply is $1000 and the aggregate price level is 100. What is the amount of real money in the country?

Question

BlackTom AI · Accepted Answer

To determine the real money in the economy, we use the real money balance concept, which is real money = nominal money supply M divided by the price level P.

- Given: M = 1000 and P = 100.
- Compute real money: 1000 / 100 = 10.

This means the purchasing power of the money supply, in terms of output goods and services, corresponds to 10 units of real money.

Note: The provided data for answer options is missing in this instance, so we cannot map the result to a specific labeled choice. However, the calculation shows that the real money balance is 10.

Suppose the money supply is $1000 and the aggregate price level is 100. What is the amount of real money in the country?

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Suppose the money supply is $1000 and the aggregate price level is 100. What is the amount of real money in the country?

Suppose the money supply is $1000 and the aggregate price level is 100. What is the amount of real money in the country?

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