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Determine Velocity Approach to Money Demand.
The Velocity Approach to Money Demand:
The velocity of money:
V = (P × Y)/ M
The real quantity of money demanded is proportional to real aggregate spending.
M × V = P × Y
M/P = 1/V × Y
Q. Demand for money and GDP? The demand for money also relies on the GDP as GDP is closely associated to national income. If you choose to hold a fixed proportion of your wealt
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