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-2015Price : $22