In drewland, the money supply equals $1,000 and velocity of money is 3. the government budget is $300, consumers spend $1500, and investors spend $500. when national output is 30, then price equals

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Business

Dominick Levy

3 May, 21:44

In drewland, the money supply equals $1,000 and velocity of money is 3. the government budget is $300, consumers spend $1500, and investors spend $500. when national output is 30, then price equals

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Rosa Mora · Answer 1

We are given:

Money supply = $1,000

Velocity of money = 3, this is the amount per unit time

Government Budget = $300

Consumers = $1500

Investors = $500

National Output = 30

First, let us group the terms:

Input = Money Supply + Investors

Output = Government Budget + Consumers

Input = $1000 + $500 = $1500

Output = $1500 + $300 = $1800

The price should be the difference of Output - Input:

$1800 - $1500 = $300.

This should be the least price value for Drewland to break even on their budget and expenses.