Nominal GDP (i.e. PY) is $7.5 trillion. The quantity of money is $3 trillion. The velocity of circulation is
A) 22.5.
B) 10.5.
C) 2.5.
D) 3.

Name: Nominal GDP (i.e. PY) is $7.5 trillion. The quantity of money is $3 trillion. The velocity of circulation is A) 22.5. B) 10.5. C) 2.5. D) 3.
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Question

Quizplus · Accepted Answer

The velocity of circulation (V) is calculated using the formula V = PY/M, where PY is the nominal GDP and M is the quantity of money. Substituting the given values, V = $7.5 trillion / $3 trillion = 2.5.

Nominal GDP (I