If during 2018 th money supply increases by 4 the inflation

If during 2018 th money supply increases by 4%, the inflation rate is 2%, and the growth of real GDP is 3%, what must have happened to the value of velocity during 2018?

Solution

We know according to qunatity theory of money MV=PY

Thus growth rate in M+growth rate in V=growth rate in P and growth rate in Y

Thus growth rate of velocity(V)=2+3-4=1%

Velocity of money would had increased by 1%