If the Stock of Money Is $20 Billion, Velocity Is

question 151

Multiple Choice

If the stock of money is $20 billion, velocity is 4, and real output is $40 billion, what is the price level?

• A) 0.5
• B) 2
• C) 8
• D) 320

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Definitions:

Tax Revenues

The income that is gained by governments through taxation—funding various public expenses.

Transfer Payments

Monetary payments made by governments that do not correspond to the provision of a good or service, such as social security payments or welfare benefits.

Federal Budget

The government's estimate of revenue and expenditure for a specific fiscal year, detailing how public funds will be allocated.

Contractionary Influence

Economic policies or conditions intended to reduce the size of the economy by decreasing the money supply or government expenditures, typically to combat inflation.