Last year, Tealandia produced 300 bags of green tea, which sold at 10 units each of Tealandia's currency-the leaf. Tealandia's money supply was 150. What was the velocity of money in Tealandia?

Question

Quizplus · Accepted Answer

Velocity of money is calculated as the ratio of nominal GDP to the money supply (MV=PY). In this case, the nominal GDP is 300 x 10 = 3000 units of the leaf. Therefore, the velocity of money is 3000/150 = 20. Therefore, the answer is C.

Last Year, Tealandia Produced 300 Bags of Green Tea, Which