If the money supply is 500 and velocity is 6, then nominal GDP:
A)is 83.33.
B)is 500.
C)is 3,000.
D)cannot be determined.

Question

Quizplus · Accepted Answer

Nominal GDP can be calculated using the formula MV = PQ, where M is the money supply, V is the velocity of money, P is the price level, and Q is the quantity of goods and services produced. Given that M = 500 and V = 6, nominal GDP (PQ) = M * V = 500 * 6 = 3,000.

If the Money Supply Is 500 and Velocity Is 6