Final answer:
The money supply is $4 billion.
Step-by-step explanation:
The money supply can be determined using the velocity of money formula:
Velocity = Nominal GDP / Money Supply
Given that the velocity of money is 4 and the nominal GDP is $16 billion, we can rearrange the formula to solve for the money supply:
Money Supply = Nominal GDP / Velocity
Substituting the given values, we get:
Money Supply = $16 billion / 4 = $4 billion
Therefore, the money supply is $4 billion.