In the Short-Run Velocity Is Not Constant

question 94

Multiple Choice

In the short-run velocity is not constant. Which of the following variables can be affected by a change in money supply?
I. real GDP
II. nominal GDP
III. the price level

• A) III only
• B) II and III
• C) I, II, and III
• D) If velocity is not constant, then none of the variables is affected.

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Definitions:

Accounts Receivable

Funds that a company is due to receive from its debtors for products or services that have been provided but are still outstanding in payment.

Payout Ratio

The percentage of net income distributed to shareholders in the form of dividends, representing the fraction of a company's earnings paid out.

Sustainable Growth Rate

The maximum rate at which a company can grow its earnings without needing to increase external financing.

Capital Intensity Ratio

refers to a financial ratio that measures the amount of fixed assets a company uses to generate its sales revenue, indicating the level of investment needed to maintain current sales levels.