Chapter 28, Problem 44P

### Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

Chapter
Section

### Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

# If GDP now falls back to and the money supply falls to what is velocity?

To determine

The velocity of money, given that the nominal GDP falls back to $1500 and money supply decreases to$350.

Explanation

The velocity of money is pace of circulation of money in the economy. The formula for calculating velocity of money is given below.

velocityofmoney=Nominal GDPMoneySupplyv=YMS

Given Information:

Money supply, MS= $350 Nominal GDP =$1500

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