Last year,Tealandia produced 60,000 bags of green tea,which sold at 10 units each of Tealandia's currency-the leaf.Tealandia's money supply was 15,000.What was the velocity of money in Tealandia?

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Quizplus · Accepted Answer

The velocity of money is calculated as the ratio of nominal GDP to the money supply. The nominal GDP is 60,000 bags * 10 leafs = 600,000 leafs. The money supply is 15,000 leafs. Therefore, the velocity of money is 600,000 / 15,000 = 40.

Last Year,Tealandia Produced 60,000 Bags of Green Tea,which Sold at 10