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Economics, 15/e
Campbell R. McConnell, University of Nebraska, Emeritus
Stanley L. Brue, Pacific Lutheran University
Chapter 19 Disputes Over Macro Theory and Policy
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Web-Based Questions
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Web-Based Questions
- Web-Based Question: The equation of exchange - what is the current velocity of money? The
fundamental equation of monetarism is the equation of exchange: MV
= PQ
= GDP. The velocity of money, V,
can be found by dividing GDP by M, the money supply. Calculate the
velocity of money for the past few years. Which GDP data should be used: real
or nominal GDP? Why? How stable is V during this time? Is V
increasing or decreasing? Get GDP data from the "GDP and Related Data"
section at the Bureau of Economic Analysis website, www.bea.doc.gov/.
Money supply data can be found at the website of the Federal Reserve, www.federalreserve.gov/,
by selecting in sequence: Research and Data, Statistics: Releases and Historical
Data, and Money Stock-Historical Data.
- Web-Based Question: Comparative stability
of real GDP-how does the United States fare? Visit the OECD Internet
site, www.oecd.org/std/nahome.htm, and select On-line Statistics. Then
examine "Quarterly Growth Rates in GDP at Constant Prices." Which
three OECD countries have had the greatest stability of real GDP growth in
the past 5 years? Which three the least?
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Origin of the Idea
Analogies, Anecdotes, and Insights