If the money supply is $500 and nominal income is $3,000, the velocity of money is A. 1/60. B. 1/6. C. 6. D. 60.

The correct option is c. 6

Explanation:

For computing the velocity of money, the following formula should be used which is shown below:

The Velocity of money = Nominal income : money supply

where,

Nominal income is $3,000

and, the money supply is $500

Now put these values to the above formula so that we can find out the answer

So, the answer would be equal to

= $3,000 : $500

= 6

Thus, the velocity of money is 6

Hence, the correct option is c. 6