If the GDP price index is 150, real GDP is $10 trillion, and the quantity of money is $5 trillion, what is the velocity of circulation? The velocity of circulation is ____Thankyou!! Starting with the velocity ofcirculation equation,...if we multiply both sides byM, we get the equation ofexchange, which states thatthe quantity of money, M.multiplied by the velocity ofcirculation, V, equals theprice level P, multiplied byreal GDP, Y.With a quantity of money of$2 trillion, and a velocity ofcirculation of 5 then...And with the price level at1.25 and real GDP at$8 trillion, then...So,ResetV= (P x Y) = MMxV=PxYMx V = $2 trillion * 5= $10 trillionPX Y = 1.25 * $8 trillion= $10 trillionMxV=PxY= $10 trillionM = $2 trillionV = 5P = 1.25Y = $8 trillionPX Y = $10 trillion

Here, given information is: GDP price index: 150 Real GDP: $10 trillion Quantity of money: $5…

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If the GDP price index is 150, real GDP is $10 trillion, and the quantity of money is $5 trillion, what is the velocity of circulation? The velocity of circulation is ____

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter26: Monetary Policy

Section: Chapter Questions

Problem 3P

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