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Macroeconomics

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Moderate

The Quantity Theory of Money: Using the Exchange Equation

MACRO-OW3PBH

Suppose that an economy has a real GDP of $\$2500$ billion, a price level of $125$, and a velocity of money of $4$. Which of the following correctly states the value of nominal GDP and the money supply in this economy?

A

$\$3125$ billion; $\$781.25$ billion

B

$\$3125$ billion; $\$625$ billion

C

$\$2000$ billion; $\$781.25$ billion

D

$\$2000$ billion; $\$625$ billion