Question

In Drewland, the money supply equals $1,000 and velocity of money is 3. The government budget is $300, consumers spend $1500, and investors spend $500. Nominal GDP equals ________

Answer 1

Answer:

Nominal GDP = $3000

Explanation:

given data

money supply M = $1,000

velocity of money V = 3

government budget = $300

consumers spend = $1500

investors spend = $500

to find out

Nominal GDP

solution

we get here Nominal GDP that is

Nominal GDP = M × V  ....................1

Nominal GDP = $1000  × 3

Nominal GDP = $3000