Question

find the velocity of money when ( m = $ 822 ), ( p = 111 ), and ( y _ { r } = $ 53 ).
( m ) is the money supply, ( v ) is the velocity of money, ( p ) is the price level, and ( y _ { r } ) is the real gross domestic product (gdp). round
your answer to 2 decimal places.

Explanation:

Step1: Recall the Quantity Equation

The quantity equation is \( MV = PY_R \), where \( M \) is the money supply, \( V \) is the velocity of money, \( P \) is the price level, and \( Y_R \) is the real GDP. We need to solve for \( V \), so we can rewrite the equation as \( V=\frac{PY_R}{M} \).

Step2: Substitute the given values

Given \( M = 822\), \( P = 111\), and \( Y_R=53\). Substitute these into the formula: \( V=\frac{111\times53}{822} \).
First, calculate the numerator: \( 111\times53=(100 + 11)\times53=100\times53+11\times53=5300+583 = 5883\).
Then, divide by the denominator: \( V=\frac{5883}{822}\approx7.16\).

Answer:

\(7.16\)