If the money GDP is $600 billion and, on the average, each dollar is spent three times per year, then the amount of money demanded for transactions purposes:
A)will be $1800 billion.
B)will be $600 billion.
C)will be $200 billion.
D)cannot be determined from the information given.

Question

Quizplus · Accepted Answer

The amount of money demanded for transactions purposes is calculated by dividing the money GDP by the velocity of money. Here, $600 billion divided by 3 equals $200 billion.

If the Money GDP Is $600 Billion And, on the Average