If the amount of money in circulation is $50 million and nominal GDP is $150 million, then the velocity of money is:
A)0.33.
B)2.
C)3.
D)impossible to determine from the information provided.

Question

If the amount of money in circulation is $50 million and nominal GDP is $150 million, then the velocity of money is:
A)​0.33.
B)​2.
C)​3.
D)​impossible to determine from the information provided.

Quizplus · Accepted Answer

The velocity of money formula is V = (Nominal GDP) / (Money supply). Substituting the given values, we get V = $150 million / $50 million = 3.

If the Amount of Money in Circulation Is $50 Million