Calculate what happens to nominal GDP if velocity remains constant at 4 and the money supply...

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Question

Calculate what happens to nominal GDP if velocity remains constant at 4 and the money supply...

Calculate what happens to nominal GDP if velocity remains constant at 4 and the money supply increases from $350 billion to $525 billion.

Originally, nominal GDP is $___trillion. (Round your response to two decimal places.)

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Answer 1

Answer #1

Answer: $1.4 trillion

Given:

Velocity = 4

Money supply = $350 billion

Nominal GDP = ?

Formula:

Calculation:

Substitute the values in the formula

Nominal GDP = 350 * 4 billion = 1.4 trillion

Originally, nominal GDP is $1.4 trillion

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Answer 2

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