If the money supply is $600,the price level is $2,and real GDP is $300,the velocity of money is _____.
A)1
B)150
C)300
D)600
E)1,200

Question

Quizplus · Accepted Answer

The velocity of money is calculated using the formula V = (P * Y) / M, where V is the velocity of money, P is the price level, Y is real GDP, and M is the money supply. Plugging in the given values: V = ($2 * $300) / $600 = $600 / $600 = 1.

If the Money Supply Is $600,the Price Level Is $2,and