If nominal income is $10 trillion and velocity is 5, what is the money supply?

Question

Quizplus · Accepted Answer

The money supply 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 nominal income (PQ) is $10 trillion and velocity (V) is 5, we can rearrange the formula to solve for M: M = PQ/V. Substituting the given values, M = $10 trillion / 5 = $2 trillion.

If Nominal Income Is $10 Trillion and Velocity Is 5