The income velocity of money is defined as nominal GDP divided by the money supply.In the winter of 2010 the U.S.nominal GDP was estimated to be around $14.5 trillion annually and M2 was $8463.5 billion.Would the income velocity of M2 be equal to 1; 1? Explain.

Question

The income velocity of money is defined as nominal GDP divided by the money supply.In the winter of 2010 the U.S.nominal GDP was estimated to be around $14.5 trillion annually and M2 was $8463.5 billion.Would the income velocity of M2 be equal to 1; <1; or > 1? Explain.

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The Answer of The income velocity of money is defined as nominal GDP divided by the money supply.In the winter of 2010 the U.S.nominal GDP was estimated to be around $14.5 trillion annually and M2 was $8463.5 billion.Would the income velocity of M2 be equal to 1; <1; or > 1? Explain.

The Income Velocity of Money Is Defined as Nominal GDP