If velocity is equal to 6, and the quantity of money is $50 billion, according to the equation of exchange nominal GDP is equal to
A) $18 billion.
B) $8.3 billion.
C) $300 billion.
D) $56 billion.
E) $150 billion.

Question

Quizplus · Accepted Answer

The equation of exchange is MV = PQ, where M is the money supply, V is the velocity of money, and PQ is nominal GDP. With M = $50 billion and V = 6, nominal GDP (PQ) is 6 * $50 billion = $300 billion.

If Velocity Is Equal to 6, and the Quantity of Money