00:01
So this question says that if the money supply fell by 10%, money supply fell by 10%.
00:16
A monetarist who expects that the nominal gdp, nominal gdp, to either rise, fall or stay the same.
00:29
So we want to know if money supply falls down by 10%, how do you think a monetary is to expect the nominal gdp to three, would it fall, would it rise, would they stay the same? so we know that an increase in the money supply will always result from inflation because aggregate demand, if aggregate demands increases, the price level will always increase.
00:57
So an increase in money supply leads to, always leads to inflation, instability of real outputs and employment so let me just say inflation and employment so even increase in money supply leads to inflation and employment there's no way a decrease in money supply will cost the nominal gdp to rise because an increase in money supplies leads to inflation therefore a decrease is the opposite so therefore the nominal gdp would always fall so therefore the answer is fall so i'm going to say therefore the gdp will fall and i'm also going to prove to you why it's going to fall because first the first option is rise that would be incorrect because the gdp will always rise if the money supply increases as you can see an increase in money supply is to inflation and when does inflation the gdp when there's employment the gdp will also rise that if the money supply increases and the second the last option stay the same is wrong because the gdp will always stay the same if the money supply stays the same.
02:33
So if the money supply doesn't change or doesn't increase, doesn't reduce, it stays the same...