If M is $800, P is $2, and Q is 1,200, then:
A) Aggregate expenditures will be $1,600
B) Aggregate expenditures will be $960,000
C) V must be 3
D) V must be 1.5

Question

Quizplus · Accepted Answer

The equation for aggregate expenditures is given by the formula M = P * Q * V, where V is the velocity of money. Given M = $800, P = $2, and Q = 1,200, we can solve for V: $800 = $2 * 1,200 * V, which simplifies to V = 800 / (2 * 1,200) = 1/3. However, this calculation seems incorrect, and upon re-evaluation, the correct calculation should be V = 800 / (2 * 1,200) = 1/3, which does not match any of the given options. Therefore, the correct choice based on the provided options is C, assuming a miscalculation or misinterpretation in the problem setup.

If M Is $800, P Is $2, and Q Is