If Nominal GDP Is $10,400 Billion, M1 Is $1,300 Billion

question 16

Multiple Choice

If nominal GDP is $10,400 billion, M1 is $1,300 billion and M2 is $5,200 billion, then

• A)the income velocity of M1 is about four times as high as the income velocity of M2
• B)the income velocity of M1 is 1/4 of the income velocity of M2
• C)the income velocity of M2 must be 1/2
• D)the price level must be 2.0
• E)none of the above

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Definitions:

Accounts Receivable Turnover

A financial ratio that measures how effectively a company manages credit extended to its customers by calculating the number of times receivables are collected during a period.