If Real GDP Is $9,600 Billion and Nominal Money Supply

question 21

Multiple Choice

If real GDP is $9,600 billion and nominal money supply is $1,200 billion, then

• A)the income velocity of money is 8.0
• B)the price level is 8.0
• C)the income velocity of money is 1.25
• D)the price level is 1.25
• E)none of the above

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Definitions:

Customized Machine

A piece of equipment specifically designed and built to meet the unique requirements of a particular business or manufacturing process.

Operating

Pertains to the ongoing, day-to-day activities involved in running a business or an organization.

Marginal Tax Rate

The rate of tax applied to the last dollar of income, used to determine how much tax will be owed on an additional dollar of income.

Operating Cash Flow

An indicator of the cash produced through a company's regular business activities.