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Assignment as written from class says




Assignment as written from class says, "As an example, calculate the velocity of money when the price level is 10, the national quantity of output is $200 billion, and the money supply is $250 billion".;The answer I came up with is the following. Is it correct? Is it exlpained well? Can you make a chart or graph reflecting the answer?.;V = (P * Y)/M, where V is the velocity, P is the price level, Y is the real GDP and M is the quantity of money or money supply (Friedman 1987). Therefore, according to the example;V = (10*200)/250=8. This means money changes hands 8 times on average.


Paper#21474 | Written in 18-Jul-2015

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