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Denis Zukic
on Nov 11, 2024

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According to the equation of exchange,if the amount of money in an economy multiplied by the velocity of money equals 800 million dollars,then this economy's:

A) real GDP equals $800 million.
B) nominal GDP equals $800 million.
C) real GDP equals $800 million times the price level.
D) nominal GDP equals $800 million times the price level.
E) price level equals $800.

Equation of Exchange

An economic formula representing the relationship between the money supply, its velocity, the price level, and the volume of transactions in an economy.

Money Supply

The collected amount of financial resources in an economy at a pointed-out time.

Velocity of Money

The speed at which money circulates from one transaction to another, and the frequency at which a single unit of currency is utilized within a specific timeframe.

  • Understand the equation of exchange and its implications for the velocity of money.
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Pranit TiwariNov 13, 2024
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