According to the Quantity theory of money, if the total transactions in the economy equal...
According to the Quantity theory of money, if the total transactions in the economy equal $20 trillion and the money supply is $10 trillion, what is the velocity of money?
| 20 |
| 2 |
| 0.50 |
| It is impossible to tell |
Homework Answers
Given
Total transaction=20 trillion ,money supply =10 trillion
According to quantity theory of money
Transaction velocity=total transaction /money supply
Velocity =20 trillion /10 trillion =2
Therefore answer is 2
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