Q.) You are given the following data on Country A’s economy in 2001 and 2011: 2001 2011 Money supply 400 600 Real GDP 100 150 Price level 10 ? According to the quantity theory of money what would be the value of the price level in 2011? A. 20 B. 15 C. 10 D. Cannot be calculated The answer is D. But why can't we calculate the Velocity of circulation given data from 2001 and use that V in 2011,since V is fixed in the long run?
