Suppose the difference between the transactions velocity and the income velocity of circulation of money in an economy is 5 and the money value of total transactions is 6 times the money value of aggregate income. If the quantity of money in circulation is 1000 currency units, then the money value of aggregate income in currency units is
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Demand for money and monetary theories has come up 82 times in 7 exams since 2005.
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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Question from the JNU SSS 2010 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.