Determine what is the velocity of money

Reference no: EM13223614

1. List three main tools available to the Fed to change the money supply in the economy.

Which tool do you think is most commonly used?

If the Fed wanted to decrease the supply of money in the economy, would the Fed buy or sell securities in the open market and what would be the first effect of this policy.

2.. Assume GDP is currently $5,600 billion per year and the quantity of money is $800 billion. What is the velocity of money? The nation collectively holds enough money to finance how many days worth of GDP expenditures?

Reference no: EM13223614

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