Last year,Tealandia produced 50,000 bags of green tea,and tea was the only good Tealandia produced.Each bag sold at 4 units each of Tealandia's currency - the Leaf.Tealandia's money supply was 40,000.What was the velocity of money in Tealandia?

Question

Quizplus · Accepted Answer

Velocity of money (V) is calculated as the ratio of total spending (PQ) to the money supply (M).

PQ = 50,000 bags x 4 Leaf per bag = 200,000 Leaf

M = 40,000 Leaf

V = PQ/M = 200,000/40,000 = 5

Therefore, the velocity of money in Tealandia was 5.

Last Year,Tealandia Produced 50,000 Bags of Green Tea,and Tea Was