Economic-GDP question-thank you?

Question

If GDP is $9,450 billion and the money supply is $3,200 billion, velocity is approximately

0.34.

3.20.

6.15.

2.95.

none of the above

Answer 1

2.95.

M/P=Y/V, since we assume price level P=1 then 3200/1=9450/V so V=9450/3200=2.95

Answer 2

The answer is 2.95.  Since the economy is almost three times as large as the money supply, the average dollar must go through almost 3 times in order to generate the $9.45B in GDP.  Generally, currency gets recycled through the economy several times in the course of  a year, with various leakages for bank reserves, private holdings of currency,and other factors.