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18 November, 09:24

Using the following information what is the velocity of money? Component Value Money supply $1 comma 900 Price level 1.81 Real GDP $9 comma 000 The velocity of money is equal to: nothing (enter your answer rounded to two decimal places ).

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  1. 18 November, 09:30
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    8.57 (approx)

    Explanation:

    Given:

    Value Money supply = $1,900

    Price level = 1.81

    Real GDP = $9,000

    Velocity of money = ?

    Computation of Velocity of money:

    Velocity of money = [Price level * Real GDP] / Value Money supply

    Velocity of money = [1.81 * $9,000] / $1,900

    Velocity of money = [$16,290] / $1,900

    Velocity of money = 8.57368421

    Velocity of money = 8.57 (approx)
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