The income velocity of money is defined as nominal GDP divided by the money supply.In the first quarter of 2013 the U.S.nominal GDP was estimated to be around $16 trillion annually and M2 was $10460.3 billion.Would the income velocity of M2 be equal to 1; 1? Explain.

Question

The income velocity of money is defined as nominal GDP divided by the money supply.In the first quarter of 2013 the U.S.nominal GDP was estimated to be around $16 trillion annually and M2 was $10460.3 billion.Would the income velocity of M2 be equal to 1; < 1; or > 1? Explain.

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The Answer of The income velocity of money is defined as nominal GDP divided by the money supply.In the first quarter of 2013 the U.S.nominal GDP was estimated to be around $16 trillion annually and M2 was $10460.3 billion.Would the income velocity of M2 be equal to 1; < 1; or > 1? Explain.

The Income Velocity of Money Is Defined as Nominal GDP