If the amount of money in circulation is $180 billion and the value of the economy's total output is $540 billion, then the
A)circulation period of money must be one-fourth of a year.
B)velocity of money is 4.
C)average price per final good sold is $3.
D)velocity of money is 3.

Question

Quizplus · Accepted Answer

The velocity of money is calculated by dividing the total output by the money supply. Here, $540 billion / $180 billion = 3.

If the Amount of Money in Circulation Is $180 Billion