Which of the Following Statements Is True

question 82

Multiple Choice

Which of the following statements is true?

• A) Velocity equals the money supply.
• B) GDP is larger than the money supply if velocity is greater than 1.
• C) The money supply must be equal to GDP.
• D) GDP is always twice the money supply.

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Definitions:

Security Market Line

A line that represents the relationship between the risk of an investment and its expected return, used in the Capital Asset Pricing Model.

Fairly Priced

A term used to denote that an asset's market price is considered reasonable based on its earnings and growth prospects.

Security Market Line

A graphical representation in the Capital Asset Pricing Model (CAPM) showing the relationship between the expected return of investments and their market risk.