Figure 22-3.On the graph,MS represents the money supply and MD represents money demand.The usual quantities are measured along the axes.
-Refer to Figure 22-3.Suppose the relevant money-supply curve is the one labeled MS₂; also suppose the economy's real GDP is 45,000 for the year.If the money market is in equilibrium,then the velocity of money is approximately

Question

Figure 22-3.On the graph,MS represents the money supply and MD represents money demand.The usual quantities are measured along the axes.

-Refer to Figure 22-3.Suppose the relevant money-supply curve is the one labeled MS₂; also suppose the economy's real GDP is 45,000 for the year.If the money market is in equilibrium,then the velocity of money is approximately

Quizplus · Accepted Answer

The velocity of money (V) is calculated using the formula V = (P * Y) / M, where P is the price level, Y is real GDP, and M is the money supply. Assuming the money supply is represented by MS2 and the economy's real GDP is 45,000, the velocity of money is approximately 9.0 when the money market is in equilibrium.