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erica [24]
3 years ago
12

If the money supply is $60 billion, the velocity of money is 7, and real GDP is $336 billion, then the price level equals:

Business
1 answer:
attashe74 [19]3 years ago
5 0

Answer:

$1.25

Explanation:

According to the quantity theory of money

money supply x velocity = real gdp x price

7 x 60 = 336 x p

p -1.25

velocity measures how fast money changes hand in the economy

real GDP is gdp adjusted for inflation

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