If Income Is $20 Billion, the Price Level Is 5

question 218

Multiple Choice

If income is $20 billion, the price level is 5, and the stock of money is $10 billion, what is the income velocity of money?

• A) 0.4
• B) 2.5
• C) 4
• D) 10

---

Definitions:

Budgeted Balance Sheet

A financial statement projected for a future date, detailing the expected assets, liabilities, and equity of a business, and used for planning purposes.

Company's Assets

Resources owned by a company that have economic value and can be used to meet its financial obligations or invest in future growth.

End of Budget Period

The conclusion of a specified time frame for which a budget was prepared, marking an opportunity to review budgetary performance against actual financial activity.

Sales Budget

A forecast of a company's sales revenue for a specific period of time.