Google has recently developed a new app called Google wallet, with which people can use their phone to shop with one touch of a button. Although Verizon Wireless declined to allow this application on their upcoming release of smartphones, this app could have a large effect on the macro economy. As discussed in class, an increase in the velocity of money would increase the supply of money and therefore shift the IS curve on our IS-LM model. How could this affect interest rate/output of the economy and how should the fed respond to this app if the velocity of money were to be increased?
Verizon Blocks Google Wallet
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