use the equation of exchange (MV=PQ;where PQ=GDP) to answer the question that follow?

Question

a) if in the year 2000 the value of GDP=$100m and velocity of circulation =5, where is the value of the money supply?
b) calculate the velocity of circulation if in the following year GDP rose by $50m and the vale of the money supply remained canstant?
c) assuming that velocity of circulation and quantity of transaction remain contant over the years, expalin the realtiontship between price level and money supply. take note of charges in money supply?

Answer 1

a) MV=100M divided by 5 = 20
b) MV=150M divided by 5 = 30
c) The price level increases as the velocity of money increases