Question - Equation of Exchange
Calculate the velocity of money if real GDP is 3,000 units, the average price level is $4 per unit, and the quantity of money in the economy is $1,500.
What happens to velocity if the average price level drops to $3 per unit?
What happens to velocity if the average price level remains at $4 per unit but the money supply rises to $2,000?
What happens to velocity if the average price level falls to $2 per unit, the money supply is $2,000, and real GDP is 4,000 units?