If nominal GDP is 2400 and the money supply is 400, what is the velocity?
1 answer:
Answer:
The velocity of money is 6.
Step-by-step explanation:
Nominal Gross Domestic Product is the Gross Domestic Product that has been determined by the current prices of goods and services in a market.
Money velocity expresses the rate at which money moves from one entity to another in a given economy. It it the ratio of the nominal Gross Domestic Product to the money supply in an economy.
i.e V =
where: V is the velocity of money, P x Y is the nominal GDP i.e price level x output/real GDP, and M is the money supply. High velocity of money causes an increase in inflation.
Given that, nominal GDP = 2400 and money supply = 400, then;
V =
= 6
Therefore the velocity of money is 6.
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Answer: OPTION D:
Step-by-step explanation:
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In order to solve this exercise you need to remember de Division of fractions:
In this case, according to the information given in the exercise, you know that of rubies are divided into 4 lots.
Therefore, in order to calculate the weight in pounds of each lot, you need to divide by 4.
Then, you get the following result:
As you can notice, this result matches with the Option D.