If an economy produces 1,000 units of output with a price level of $1 and the money supply (M) is $500, velocity is:
A) 2.
B) 500.
C) 50.
D) 5.

Name: If an economy produces 1,000 units of output with a price level of $1 and the money supply (M) is $500, velocity is: A) 2. B) 500. C) 50. D) 5.
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Quizplus · Accepted Answer

Velocity (V) is calculated using the formula V = (P * Y) / M, where P is the price level, Y is the output, and M is the money supply. Here, V = (1 * 1000) / 500 = 2.

If an Economy Produces 1,000 Units of Output with a Price