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      Question

      Suppose nominal GDP equals 1,000 units and money supply

      equals 250 units. Based on the quantity theory of money, the velocity of money equals.
      A 40 Correct Answer Incorrect Answer
      B 4 Correct Answer Incorrect Answer
      C 2,50,000 Correct Answer Incorrect Answer
      D 500 Correct Answer Incorrect Answer

      Solution

      MV= PY. V=PY/M = 1000/250 = 4      

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