In a Small Economy, the Quantity of Money Circulating in the Economy

question 189

Multiple Choice

In a small economy, the quantity of money circulating in the economy is $2.5 million. Real GDP for the current year is $5 million, and the average price level is 2. What is the velocity of money?

• A) 4
• B) 2
• C) 2.5
• D) 5

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Definitions:

[H+]

[H+] denotes the concentration of hydrogen ions in a solution, which is a measure of the acidity or alkalinity (pH) of the solution.

K

The chemical symbol for Potassium, a soft, silver-white metal belonging to the alkali metal group of the periodic table.

[H+]

A notation representing the concentration of hydrogen ions in solution, often used in the context of acidity or pH levels.

K

Symbol for Potassium, a chemical element with atomic number 19, essential for various bodily functions including nerve signal transmission and muscle contraction.