The Solution.: Task 1
The Solution.: Task 1
The Solution.: Task 1
Therefore, as a result of accelerating the circulation of the money supply, the need for
it to ensure non-inflationary circulation will decrease by the following amount:
356.91 - 169.06 = 187.85 (UAH billion)
3.If no mutual debt settlement is carried out, then:
949 , 9 – 0,3 x 949,9+120
Mn3 = 1,8
= 436,07 (UAH billion)
Thus, if the mutual settlement of debts is stopped, the need for money to ensure a
non-inflationary circulation will increase by the following amount:
436.07 - 356.91 = UAH 79.16 billion
Answer: Mn1 = UAH 356.91 billion; Mn2 = 169.06 billion UAH; Mn3 = 436.07 billion
UAH
Task 4
Determine how the nominal GDP will change if the money turnover rate is 1.84
revolutions and remains unchanged and the money supply increases from UAH 259
to UAH 391 billion.
The task is calculated according to the NBU Annual Report - 2007.
https://www.bank.gov.ua/an_rep/A_report_2007.pdf.
The solution.
GDP is calculated based on I. Fisher's equation:
MxV=PxQ
where M is the money supply, UAH;
V - the speed of circulation of money, turnover;
P - average price level, UAH / mind. ol .;
Q - the physical volume of GDP, mind. ol.
And,
P x Q = GDP
Therefore,
GDP = M x V
Thus, the correlation between money supply and national GDP is directly
proportional. Calculate the nominal GDP before and after the growth of money
supply:
GDP1 = 259 x 1,84 = 476,56 (UAH billion)
GDP2 = 391 x 1.84 = 719.44 (UAH billion)
Growth in nominal GDP under the influence of money supply growth was:
719.44 - 476.56 = 242.88 (UAH billion)
Answer: ΔGDP = UAH 242.88 billion.
Task 5
Determine the average quarterly and annual rate of money circulation in Ukraine
according to the following real data of 2008:
- as of 1 April 2008 GDP amounted to UAH 187.717 billion; money supply (M3
2008) - UAH 416.013 billion;
- as of 1 July 2008 GDP - UAH 421.217 billion; money supply (M3 2008) - UAH
450.589 billion;
- as of 01.10 GDP 2008 - UAH 697,194 billion; money supply (M3 2008) - UAH
477.659 billion;
- as of December 31, 2008 GDP amounted to UAH 949.864 billion; money supply
(M3 2008) - UAH 515.727 billion
The task is calculated according to the NBU Annual Report - 2008.
https://www.bank.gov.ua/Publication/an_rep/A_report_2008.pdf.
The solution.
To find the quarterly rate of money circulation, it is necessary to calculate the rate of
money circulation for each quarter separately, using the formula:
GDPi
V= Mi ,
421,417 – 187,717
V2 = 450,589
= 0,52 (c)
697,194−421,417
V3 = 477,659
= 0,58 (c)
949,864−697,194
V4 = 515,727
= 0,49 (c)
0,45+0,52+0,58+0,49
Vq = 4
= 0,51 (c)
where
GDP - the annual GDP;
Mc - average amount of money in circulation per year:
416,013+ 450,589+ 477,659+515,727
Mc = 4
= 464,997 (UAH billion)
949,864
VCp = 464,997 = 2,04 (c)
Answer: in 2008, the average quarterly velocity of money for the M3 unit is: Vq = 0.51
c.; annual turnover rate is: VCp = 2.04 c.
Task 6
Calculate the aggregate structure and average turnover rate of the money supply, as
well as the duration of one turnover in days according to the data given in Table 2.
The task is calculated according to the NBU Annual Report - 2008.
(https://www.bank.gov.ua/Publication/an_rep/A_report/_2008.pdf).
Table 2
Indicators at the beginning of the at the end of the reporting
reporting year year
(I quartal) UAH billion (IV quartal)UAH billion
Since we have data on the sale of goods on credit, we use the formula to find the
average rate of circulation of money supply:
PQ −K + P−V
Vc = Mc
18,805+ 96,91
∑K= 2
= 57,86 (UAH billion);
47,89+22,641
∑P= 2
= 35,27 (UAH billion);
2+ 3
∑V = 2 = 2,5 (UAH billion);
416,013 515,727
Mc = 2
= 465,87 (UAH billion);
569,82−57,86+35,27−2,5
Vc = 465,87
= 1,17 (c);
365 365
Tc = Vc = 1,17 = 312 (d).