In the second quarter of 1995, the following values were observed: real GDP = 4,359.3 billion; GDP deflator = 325.1; and M1 = 989.5. What is the value of velocity?

Question

Quizplus · Accepted Answer

Velocity (V) can be calculated using the equation: V = (Nominal GDP / Price Level) = (M1 / GDP deflator). Plugging in the given values, we get V = (989.5 / 325.1) = 3.04. Therefore, the answer is C, which is the closest value to 3.04.

In the Second Quarter of 1995, the Following Values Were