If income is $60 billion, the price level is 6, and the stock of money is $36 billion, what is the velocity of money?
A) 2.4
B) 3.6
C) 10
D) 36

Name: If income is $60 billion, the price level is 6, and the stock of money is $36 billion, what is the velocity of money? A) 2.4 B) 3.6 C) 10 D) 36
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Question

Quizplus · Accepted Answer

Velocity of money (V) = (Nominal GDP) / (Money Supply). 
Nominal GDP = (Price Level) x (Real GDP) = 6 x (Income) = 6 x 60 = 360. 
Therefore, V = 360 / 36 = 10.

If Income Is $60 Billion, the Price Level Is 6