If an Economy Has a Velocity of Circulation of 3

question 471

Multiple Choice

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

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

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Definitions:

Equity Theory

A concept in social psychology that describes how individuals strive for fairness in exchanges or transactions, particularly in relation to others.

O/I Ratio

In business, often refers to the Operating Income Ratio, a metric used to assess financial performance.

Referent Others

Individuals or groups that people compare themselves to for the purpose of self-evaluation or seeking guidance.

Perceived Inequity

The feeling or belief that an individual's inputs and outputs in a certain situation or relationship are not equitable compared to others.