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19 Oct 2020
Calculate M1 if the velocity of M1 is 7.9 and the nominal GDP was $18.9 trillion.
Calculate M1 if the velocity of M1 is 7.9 and the nominal GDP was $18.9 trillion.
Darryn D'SouzaLv10
19 Oct 2020
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Related questions
Here are annual values for M1, M2 and for nominal GDP (all figures are in the billions of dollars) for the mid-1990s:
| Year | M1 | M2 | Nominal GDP |
| 1993 | 1129.6 | 3482.0 | 6657.4 |
| 1994 | 1150.7 | 3498.1 | 7072.2 |
| 1995 | 1127.4 | 3642.1 | 7397.7 |
| 1996 | 1081.3 | 3820.5 | 7816.9 |
| 1997 | 1072.5 | 4034.1 | 8304.3 |
Compute the M1 velocity for these years. If you were going to use a monetary target, would M1 or M2 have been preferable during the 1990s? Explain your reasoning.
