Problem
Suppose that the level of nominal GDP in Estilvania is $30 billion and the level of the money supply is $10 billion.
a. What is the velocity of money in Estilvania?
b. Suppose that the money supply increases to $15 billion and nominal GDP rises to $45 billion. What has happened to velocity?
c. Suppose that the money supply increases to $15 billion and nominal GDP rises to $40 billion. What has happened to velocity?
d. Suppose that the money supply decreases to $8 billion and, as a result, both the price level and real GDP fall, leading to a decrease in nominal GDP to $26 billion. What has happened to velocity?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.