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In which case is velocity the highest?
a. the price level equals 4, the money supply equals 5,000, and output equals 20,000.
b. the price level equals 4, the money supply equals 20,000 and output equals 5,000.
c. the price level equals 2, the money supply equals 5,000, and output equals 20,000.
d. the price level equals 2, the money supply equals 20,000 and output equals 5,000

Respuesta :

Answer:

a. the price level equals 4, the money supply equals 5,000, and output equals 20,000. 

Explanation:

Velocity = (price × output) / money supply

A. (4 × 20,000) / 5000 = 16

B. (4 × 5000) / 20000 = 1

C. (2 × 20,000) / 5000 = 8

D. (2 × 5000) / 10000 = 0.5

The highest velocity is option A.

I hope my answer helps you

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