If the money supply equals $1,000 and nominal GDP equals $3,000,then V
A)equals 1/3
B)equals 3
C)equals 3 million
D)cannot be determined since we do not know anything about prices
E)cannot be determined since we do not know anything about real GDP

Question

Quizplus · Accepted Answer

Velocity of money (V) is calculated by dividing nominal GDP by the money supply (V=GDP/M). So, V=$3,000/$1,000=3.

If the Money Supply Equals $1,000 and Nominal GDP Equals