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What number do you think is most likely to be the velocity of money?
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Solved in 3 steps
- What is velocity of money? List two major determinants of velocity of money.Velocity of Money in the United States. Using the Federal Reserve Bank of St. Louis Web site (www. research.stlouisfed.org/fred2), calculate the velocity of M1 and M2 in 1960 and 2000. How have they changed?How stable is the velocity of money?
- If GDP now rises to 1,600, but the money supply does not change, how has velocity changed? If GDP now falls back to 1,500 and the money supply falls to 350, what is velocity?How does inflation affect the purchasing power of money, and what are some common causes of inflation in an economy?If GDP is1,500 and the money supply is 400,what is velocity?