According to Eqt of Exchange, when an economy is experiencing deflation, which of the following is CORRECT?
A. If money supply decreases at same rate as the general price level, real output & velocity of circulation of money will increase.
B. In absence of changes in money supply, a decrease in velocity of circulation of money may lead to a rise in real output.
C. In absence of changes in money supply, an increase in velocity of circulation of money will be smaller than the increase in real output.
D. If money supply & real output remain constant, the velocity of circulation of money will remain unchanged.

Suppose expected real interest rate & expected inflation rate are 5% & 8% respectively. If real rate of return on holding cash is 5%, we can conclude that actual inflation rate is _____% & the nominal interest rate is ____%.

第一名成功解答者可獲5明彩 Thx for help

C,because MV=PY.If Y increase and P decrease,V increase must be smaller.
actual inflation:8%.because expected real interest rate =actual real interest rate
nominal interest rate :13%=5%+8%

ES5859 :C,because MV=PY.If Y increase and P decrease,V increase must be smaller.
actual inflation:8%.because expected real interest rate =actual real interest rate
nominal interest rate :13%=5%+8%

哦... 原來我睇漏左P會跌...
第2題錯喎...

Q2 options:
A. -5%... 13%
B. 5%... 3%
C. -3%... 13%
D. 3%... 5%

If real rate of return on holding cash is 5%, 即係你將錢留嚮手唔放入銀行, 筆錢會升值幾多.

所以, The economy 應該處於Deflation, actual inflation rate係Minus, 即係-5%.

Nominal interest rate 因為係Nominal, 所以係8%+5%=13% (呢個我自己都非常唔肯定..)

因此個答案係 A

岩唔岩? :$

但係好肯定Expected real interest rate 絕對唔等於 Actual real interest rate, 一個係預期, 一個係現實..

GNZ9068 :If real rate of return on holding cash is 5%, 即係你將錢留嚮手唔放入銀行, 筆錢會升值幾多.

所以, The economy 應該處於Deflation, actual inflation rate係Minus, 即係-5%.

Nominal interest rate 因為係Nominal, 所以係8%+5%=13% (呢個我自己都非常唔肯定..)

因此個答案係 A

岩唔岩? :$

但係好肯定Expected real interest rate 絕對唔等於 Actual real interest rate, 一個係預期, 一個係現實..

答案岩.
係咪即係話個Real rate of return on holding cash 係+ve, economy就係deflation, 咁只要將個rate of return由+ve變-ve，就可以知道個actual inflation rate??

Nominal interest rate明白, Fisher Equation.

leungfan :

GNZ9068 :If real rate of return on holding cash is 5%, 即係你將錢留嚮手唔放入銀行, 筆錢會升值幾多.

所以, The economy 應該處於Deflation, actual inflation rate係Minus, 即係-5%.

Nominal interest rate 因為係Nominal, 所以係8%+5%=13% (呢個我自己都非常唔肯定..)

因此個答案係 A

岩唔岩? :$

但係好肯定Expected real interest rate 絕對唔等於 Actual real interest rate, 一個係預期, 一個係現實..

答案岩.
係咪即係話個Real rate of return on holding cash 係+ve, economy就係deflation, 咁只要將個rate of return由+ve變-ve，就可以知道個actual inflation rate??

Nominal interest rate明白, Fisher Equation.

紅色：我估就係啦, 而且照道理都係.. 不過點解我冇學過呢個Terms...

呢題係邊屆PP? 出得咁差, Expected同 Actual唔講清楚.

GNZ9068 :

leungfan :

GNZ9068 :If real rate of return on holding cash is 5%, 即係你將錢留嚮手唔放入銀行, 筆錢會升值幾多.

所以, The economy 應該處於Deflation, actual inflation rate係Minus, 即係-5%.

Nominal interest rate 因為係Nominal, 所以係8%+5%=13% (呢個我自己都非常唔肯定..)

因此個答案係 A

岩唔岩? :$

但係好肯定Expected real interest rate 絕對唔等於 Actual real interest rate, 一個係預期, 一個係現實..

答案岩.
係咪即係話個Real rate of return on holding cash 係+ve, economy就係deflation, 咁只要將個rate of return由+ve變-ve，就可以知道個actual inflation rate??

Nominal interest rate明白, Fisher Equation.

紅色：我估就係啦, 而且照道理都係.. 不過點解我冇學過呢個Terms...

呢題係邊屆PP? 出得咁差, Expected同 Actual唔講清楚.

舊年學校exam paper, 至於係邊屆既CE pp就唔清楚喇。。。