If an economy has a money supply of $200, a velocity of money of 12, and a price level of $2, how many units of output does it produce?

Name: If an economy has a money supply of $200, a velocity of money of 12, and a price level of $2, how many units of output does it produce?
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Quizplus · Accepted Answer

The equation of exchange is MV = PY, where M is the money supply, V is the velocity, P is the price level, and Y is the output. Plugging in the values: 200 * 12 = 2 * Y, which gives Y = 1,200.

If an Economy Has a Money Supply of $200, a Velocity