Answer the question on the basis of the following information for a hypothetical economy.All values are in nominal terms.
M = $100
V = 2
Ca = $160
Xn = $10
G = $10
Nominal GDP is
A)$100.
B)$200.
C)$180.
D)$50.

Question

Answer the question on the basis of the following information for a hypothetical economy.All values are in nominal terms.
M = $100 
V = 2
Ca = $160
Xn = $10
G = $10
Nominal GDP is
A)$100.
B)$200.
C)$180.
D)$50.

Quizplus · Accepted Answer

Nominal GDP can be calculated using the equation of exchange: MV = GDP. Here, M (money supply) is $100 and V (velocity of money) is 2. Therefore, Nominal GDP = $100 * 2 = $200.

Answer the Question on the Basis of the Following Information