If annual GDP is $100 billion and the MS is $20 billion, the velocity of money (VM) is ________.
A) 2
B) 5
C) 20
D) 50

Name: If annual GDP is $100 billion and the MS is $20 billion, the velocity of money (VM) is ________. A) 2 B) 5 C) 20 D) 50
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Quizplus · Accepted Answer

The velocity of money equation is MV = PY, where M is the money supply, V is velocity, P is the price level, and Y is real GDP. Rearranging the equation to solve for V, we get V = PY/M. Plugging in the given values, we get V = (100 billion)/(20 billion) = 5.

If Annual GDP Is $100 Billion and the MS Is