Thank you for visiting Suppose that the money supply is 1 trillion and the money velocity is 4 The equation of exchange would predict the nominal GDP to be. This page is designed to guide you through key points and clear explanations related to the topic at hand. We aim to make your learning experience smooth, insightful, and informative. Dive in and discover the answers you're looking for!
Answer :
The velocity of money can be calculated as the ratio of nominal gross domestic product (GDP) to the money grant (V=PQ/M), which can be used to gauge the economy's power or people's willingness to spend money.
What is nominal GDP formula?
Nominal GDP = Real GDP x GDP Deflator
Nominal GDP: An monetary measure that measures the price of all financial outputs at the prevailing market prices. Real GDP: An financial measure that bills only for the alternate in quantity output.
How do we calculate pace of cash in the equation of exchange?
The pace of cash is calculated by dividing the nominal GDP by using the volume of cash in the economy. The extent of cash in the economy is the cash supply, which is decided through the central bank.
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