If the money supply in an economy equals $1,000 and nominal GDP equals $3,000,then according to the equation of exchange,velocity of money:

Question

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According to the equation of exchange, MV = PQ, where M is the money supply, V is the velocity of money, P is the price level, and Q is real GDP. We are given that M = $1,000 and nominal GDP (PQ) = $3,000, so we can solve for V as V = PQ/M = $3,000/$1,000 = 3. Therefore, the velocity of money equals 3.

If the Money Supply in an Economy Equals $1,000 and Nominal