Let's consider a hypothetical economy where this year's money supply is Tk. 100, nominal GDP is Tk. 40000 and real GDP is Tk. 5000

Let's consider a hypothetical economy where this year's money supply is Tk. 100, nominal GDP is Tk. 40000 and real GDP is Tk. 5000.

a) Calculate the price level. b) Calculate the velocity of money. c) Suppose the central bank changes the money supply so that the new money supply is Tk. 500, calculate the new price level.

Solution Video: https://youtu.be/Zitx1Y75nb8