If nominal GDP is $10,400 billion, M1 is $1,300 billion and M2 is $5,200 billion, then

Name: If nominal GDP is $10,400 billion, M1 is $1,300 billion and M2 is $5,200 billion, then
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The income velocity of money is calculated as nominal GDP divided by the money supply. For M1, the velocity is $10,400 billion / $1,300 billion = 8. For M2, it is $10,400 billion / $5,200 billion = 2. Therefore, the income velocity of M1 is indeed four times as high as the income velocity of M2.

If Nominal GDP Is $10,400 Billion, M1 Is $1,300 Billion