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Basic Question 1 of 14

According to the quantity theory of money, if the GDP is $6 trillion and the M1 money supply is $800 billion, the velocity of the M1 money supply is ______.

A. 0.133
B. 7.500
C. 6.500
Check Answer Next Q Print

User Contributed Comments 3

User Comment
danlan Note the GDP is measured by trillion and money supply is measured by billion, so the velociy is 6000/800=7.5
choas69 M x V = P x Y
M(800) x V = P x Y (6000)
V = 6000/800
V = 7.500
Raycoyuen Correct
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Colin Sampaleanu

Colin Sampaleanu

Learning Outcome Statements

compare monetary and fiscal policy;

describe functions and definitions of money;

explain the money creation process;

CFA® 2024 Level I Curriculum, Volume 2, Module 12.