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Ludmilka [50]
2 years ago
15

Suppose nominal GDP is​ $2,000 a year and the quantity of money is​ $400. Then the velocity of circulation equals

Business
1 answer:
ahrayia [7]2 years ago
3 0

Answer: 5

Explanation:

The velocity of circulation is the average number of times that each dollar can be used for the purchase of goods and services in a year.

From the information given in the question, the velocity of circulation will be:

= Nominal GDP / Quantity of money

= $2000 / $400

= 5

Therefore, the velocity of circulation is 5.

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