If an Economy Has a Velocity of Circulation of 3

question 146

Multiple Choice

If an economy has a velocity of circulation of 3, then

• A) nominal GDP is 1/3 the size of the quantity of money.
• B) the quantity of money is $3 for every dollar of GDP.
• C) the quantity of money is 3 times real GDP.
• D) in a year the average dollar is exchanged 3 times to purchase goods and services in GDP.

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Definitions:

Discount Date

The specified date on which a discounted transaction must be completed or by which a payment must be made to avail a reduced price.

Due Date

The specified date by which a task, obligation, or payment must be completed or submitted.

Cash Discount

A deduction from the invoice price offered by the seller to the buyer for prompt payment of their bill.

Discount Date

The specified date by which payment of a bill or invoice is required to avail a discount for early payment.