If the velocity of money is 10 and nominal GDP is $1,000, then money supply is _____
A) $1.
B) $10.
C) $100.
D) $500.
E) $1,000.

Question

Quizplus · Accepted Answer

The money supply can be calculated using the formula for the velocity of money: Velocity of Money = Nominal GDP / Money Supply. Rearranging the formula to solve for the money supply gives Money Supply = Nominal GDP / Velocity of Money. Plugging in the given values, Money Supply = $1,000 / 10 = $100.

If the Velocity of Money Is 10 and Nominal GDP