If velocity = 5, the price level = 1.5, and the real value of output is 2,500, then the quantity of money is
A)333.33.
B)750.00.
C)1,050.00.
D)8,333.33.

Question

Quizplus · Accepted Answer

The quantity equation is MV = PY, where M is the quantity of money, V is velocity, P is the price level, and Y is the real value of output. Plugging in the values: M * 5 = 1.5 * 2500, solving for M gives M = 750.00.

If Velocity = 5, the Price Level = 1