Ask Question
7 December, 07:29

Suppose that real GDP equals $10 trillion, nominal GDP equals $20 trillion, and the aggregate price level equals 2.

If the velocity of money is 2, the money supply is:

a) $20 trillion. b) $10 trillion. c) $5 trillion. d) $40 trillion.

+2
Answers (1)
  1. 7 December, 07:51
    0
    b) $10 trillion

    Explanation:

    Price level = NGDP / RGDP = 2

    NGDP / RGDP = 2

    As per the quantity theory of money,

    MV = PQ

    M. (2) = 20

    M = 10 trillion

    Therefore, The money supply is $10 trillion.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Suppose that real GDP equals $10 trillion, nominal GDP equals $20 trillion, and the aggregate price level equals 2. If the velocity of ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers