LD: Use the following graph to answer On the and MD represents money demand. The
ID: 1115107 • Letter: L
Question
LD: Use the following graph to answer On the and MD represents money demand. The usual quantities are er question 20: On the graph, MS represents the money sapply MS 875 075 0625 375 0 25 .125 MD2 MD 5,000 20. Refer to the graph above. Suppose that the relevant money-demand curve is the one labetled MD1. Also, suppose that the economy's real GDP is 30.000 for the year. If the money market is in equilibrium, then the velocity of money is approximately: a. 4 c. 8 d. 12. 21. Minimum wage laws contribute to structural unemployment by a. Keeping wages above the market-clearing (equilibrium) level. b. Keeping wages below the market-clearing (equilibrium) level c. Allowing unemployed workers to search longer or less intensively for jobs d. Forcing unemployed workers to take the first job offered to them.Explanation / Answer
20. equation: MV = PY.
M is a measure of the money supply, V its velocity, and nominal GDP is written as the product of the overall price level (P) with real GDP (Y).
5000 * V = 30000
V = 30/5
V=6
Option b
21. Minimum wage laws distort the efficient working of labor markets by keeping wages above market-clearing levels. Thus, these laws contribute to structural unemployment.
Option a
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