Suppose the money supply is $1000 and the aggregate price level is 100. What is the amount of real money in the country?

Question

BlackTom AI · Accepted Answer

The question asks for real money in the economy given a money supply of 1000 and a price level of 100. To convert nominal money to real money, we divide the nominal money by the price level: Real money = M / P.

Here, M = 1000 and P = 100, so Real money = 1000 / 100 = 10.

In the provided data, the answer field indicates 'e. 10', but the answer_options list is empty, so there are no alternative choices to compare against. If options were present, they would typically include numbers reflecting various real money calculations (for example, 5, 10, 20, etc.), and this calculation shows 10 as the correct real money balance given M and P.

Key conceptual point: real money balance represents purchasing power of the nominal money stock, stripping out the effect of the price level. The formula M/P captures this idea directly, and the calculation above follows it precisely.

Note on missing options: since the answer_options array is empty, there is no explicit set of choices to evaluate against, which means the reasoning must rely solely on the standard formula M/P and the given values for M and P.

Suppose the money supply is $1000 and the aggregate price level is 100. What is the amount of real money in the country?Single choice

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Suppose the money supply is $1000 and the aggregate price level is 100. What is the amount of real money in the country?

Suppose the money supply is $1000 and the aggregate price level is 100. What is the amount of real money in the country?

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