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    5. Suppose nominal GDP equals 1,000 units and money supply equals 250 units. Based on the quantity theo

    Question

    Suppose nominal GDP equals 1,000 units and money supply

    equals 250 units. Based on the quantity theory of money, the velocity of money equals.
    A 40 Correct Answer Incorrect Answer
    B 4 Correct Answer Incorrect Answer
    C 2,50,000 Correct Answer Incorrect Answer
    D 500 Correct Answer Incorrect Answer

    Solution

    MV= PY. V=PY/M = 1000/250 = 4      

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