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:

Extensive Assortment

A wide variety and choice of products offered by a retailer, aimed at catering to diverse consumer needs and tastes.

Distribution Policies

The strategies and rules set by a company to control the distribution and sale of its products through various channels.

Selling Agents

Individuals or companies that act on behalf of sellers to market and sell their products or services.

Intermediaries

Agents or businesses that act as a middleman in the distribution chain, moving products from producers to consumers.