Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 15: Q.44 (page 380)

If GDP now falls back to 1,500 and the money supply falls to 350, what is velocity

Short Answer

Expert verified

The velocity of money that has GDP as 1,500 and Money Supply of 350 will be 4.28.

Step by step solution

01

Definition

The velocity of capital is a calculation of the pace at which money is traded in an economy. It is the digit of points that banknotes move from one commodity to another. It even directs to how much a unit of currency is operated in a provided period of time. Simply set, it's the pace at which customers and industries in an economy collectively pay funds.

02

Velocity of money

Velocity of money can be expressed as the speed with which the funds circulates in the economy. The general term of velocity of money is noted down

Velocity=Nominal GDPMoney Supply

GDP=1500

Moneysupply=350

Velocity=1,500350

=4.28

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

List the three traditional tools that a central bank has for controlling the money supply

Which kind of monetary policy would you expect in response to high inflation: expansionary or contractionary? Why?

What is the basic quantity equation of money?

Define the velocity of the money supply.

Name and briefly describe the responsibilities of each of the following agencies: FDIC, NCUA, and

OCC.
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free