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Which of the following statements is true? Question 2 options: Velocity equals the money supply. GDP is larger than the money supply if velocity is greater than 1. The money supply must be equal to GDP. GDP is always twice the money supply.

Respuesta :

Answer:

GDP is larger than the money supply if velocity is greater than 1

Explanation:

According to the quantity theory of money :

price x quantity = money supply x velocity

GDP = money supply x velocity

If velocity = 2

money supply is 20

then GDP = 2 x 20 = 40

gdp is greater than money supply

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