If the velocity of money is 3,nominal GDP is $300 billion and real GDP is $250 billion,then the supply of money is:
A)$100 billion.
B)$50 billion.
C)$2500 billion.
D)$2 billion.
E)indeterminate.

Question

Quizplus · Accepted Answer

The velocity of money (V) is calculated as V = Nominal GDP / Money Supply. Given V = 3 and Nominal GDP = $300 billion, the Money Supply = $300 billion / 3 = $100 billion.

If the Velocity of Money Is 3,nominal GDP Is $300