Suppose the money supply is $1,000, the price level is 3, and real income (or output) is $5,000.What is the velocity of money?
A) 0.2
B) 0.6
C) 1.67
D) 15

Name: Suppose the money supply is $1,000, the price level is 3, and real income (or output) is $5,000.What is the velocity of money? A) 0.2 B) 0.6 C) 1.67 D) 15
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Question

Suppose the money supply is $1,000, the price level is 3, and real income (or output) is $5,000.What is the velocity of money?  
A) 0.2 
B) 0.6 
C) 1.67 
D) 15

Quizplus · Accepted Answer

The velocity of money (V) is calculated using the formula V = (Price Level * Real Income) / Money Supply. Substituting the given values: V = (3 * 5000) / 1000 = 15.

Suppose the Money Supply Is $1,000, the Price Level Is