If Real GDP is $9,000,the money supply is $12,000,and velocity is 3,then the price level is

Name: If Real GDP is $9,000,the money supply is $12,000,and velocity is 3,then the price level is
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Question

Quizplus · Accepted Answer

The equation of quantity theory of money is MV=PQ where M is money supply, V is velocity, P is price level and Q is real GDP. Rearranging the equation to solve for P, we get P=MV/Q. Substituting the given values, we get P=($12,000)(3)/$9,000=4. Therefore, the correct answer is C.

If Real GDP Is $9,000,the Money Supply Is $12,000,and Velocity