The money demand function is ; where, is nominal money supply, is the aggregate price level, is the real GDP, and is the nominal interest rate. Suppose that , and .
The velocity of money is ______ (in integer)
2 marksMacroeconomicsDemand for money and monetary theoriesThe quantity theory of money and velocityModerateabout 2 min
GATE 2026 Question 63: Demand for money and monetary theories
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The money demand function is M/P=800+0.3Y-2000i; where, M is nominal money supply, P is the aggregate price level, Y is the real GDP, and i is the nominal interest rate. Suppose that Y=2000, and i=0.20. The velocity of money is (in integer)
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What this question tests
This question is on The quantity theory of money and velocity, part of Demand for money and monetary theories in Macroeconomics.
The link between the money stock, prices and output through velocity.
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