To find the quantity of money, we can use the equation of exchange from quantity theory of money, which can be expressed as:
\[ MV = PY \]
where:
- \( M \) = quantity of money
- \( V \) = velocity of money
- \( P \) = price level
- \( Y \) = real value of output
Given the values:
- Velocity (\( V \)) = 5
- Price level (\( P \)) = 2
- Real value of output (\( Y \)) = 2,500
We can substitute these values into the equation:
\[ M \cdot 5 = 2 \cdot 2,500 \]
Calculating the right side:
\[ 2 \cdot 2,500 = 5,000 \]
Now we have:
\[ 5M = 5,000 \]
To solve for \( M \), divide both sides by 5:
\[ M = \frac{5,000}{5} = 1,000 \]
Thus, the quantity of money is:
d. $1,000.
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