According to the Equation of Exchange,if the Amount of Money

question 45

Multiple Choice

According to the equation of exchange,if the amount of money in an economy multiplied by the velocity of money equals 800 million dollars,then this economy's:

• A)real GDP equals $800 million.
• B)nominal GDP equals $800 million.
• C)real GDP equals $800 million times the price level.
• D)nominal GDP equals $800 million times the price level.
• E)price level equals $800.

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Definitions:

Finished Goods Inventory

Manufactured goods that are complete and ready for sale.

Lower of Cost

A principle typically applied in the valuation of inventory and financial assets, stating to record the asset at the lower of its historical cost or current market value.

Net Realizable Value

The estimated selling price in the ordinary course of business, minus the estimated costs of completion and the necessary costs to make the sale.

Inventory

The raw materials, work-in-progress products, and finished goods considered to be the part of a business's assets that are ready or will be ready for sale.