Suppose the Public Holds $200 Billion in M2 and the Velocity

question 165

Multiple Choice

Suppose the public holds $200 billion in M2 and the velocity of the M2 money supply is 5.What is the value of GDP?

• A)$500.
• B)$1,000.
• C)$1,500.
• D)That information cannot be determined.

---

Definitions:

Independent Events

Describes two events where the occurrence of one does not affect the probability of the occurrence of the other.

Conditional Probability

The odds of an event taking place assuming another distinct event has occurred previously.

Joint Probability

The probability of two or more events happening at the same time, assuming there is some relationship between the events.

Complement Rule

A principle in probability theory stating that the probability of the complement of an event equals one minus the probability of the event itself.