According to the Equation of Exchange,if Nominal GDP Equals $6

question 90

Multiple Choice

According to the equation of exchange,if nominal GDP equals $6 trillion and the money supply equals $1 trillion,the velocity of money:

• A)must be 6.
• B)must be 1/6.
• C)must be 6 trillion.
• D)must be 1/6 trillion.
• E)cannot be determined unless we know the price level.

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Definitions:

Susceptibility

The likelihood or tendency to be influenced or harmed by a particular thing or condition.

Egocentrism

The inability to differentiate between self and other, often resulting in viewing the world solely from one's own perspective.

Conservation

The understanding that certain properties of an object or substance remain the same even when its appearance changes, a concept grasped during the concrete operational stage in Piaget's theory of cognitive development.

Mass

A measure of the amount of matter in an object, fundamental in physics and chemistry for understanding the properties of substances.