If the amount of money in circulation is $200 million and nominal GDP is $400 million,the velocity of money is
A)0.5.
B)2.
C)200.
D)400.

Name: If the amount of money in circulation is $200 million and nominal GDP is $400 million,the velocity of money is A)0.5. B)2. C)200. D)400.
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Question

Quizplus · Accepted Answer

The velocity of money formula is: 
Velocity of Money = Nominal GDP / Money Supply

Substituting the given values, we get: 
Velocity of Money = 400 million / 200 million = 2

Therefore, the velocity of money is 2.

If the Amount of Money in Circulation Is $200 Million