rreyesrreyes173 rreyesrreyes173
  • 14-01-2018
  • Business
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If real gdp is $4 billion, the price level is 1.25, and the nominal money stock is $500 million, then velocity is

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Kalahira
Kalahira Kalahira
  • 26-01-2018
Real GDP G = $4 billion
 Price level P = 1.25
 Money Supply M = 500 million = 0.5 billion
 We have an equation M x V = P x G
 => V = P x G / M
 => V = 1.25 x 4 / 0.5
 => V = 5 / 0.5
 So the velocity V = 10
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