Other Things the Same,a Decrease in Velocity Means That

question 77

Multiple Choice

Other things the same,a decrease in velocity means that

• A)the rate at which money changes hands falls,so the price level rises.
• B)the rate at which money changes hands falls,so the price level falls.
• C)the rate at which money changes hands rises,so the price level rises.
• D)the rate at which money changes hands rises,so the price level falls.

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Definitions:

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a particular period, indicating the efficiency of inventory management.

Current Ratio

A liquidity measure that indicates a company's ability to pay short-term obligations with its current assets.

Working Capital

A financial metric representing the difference between a company's current assets and current liabilities, indicating its short-term liquidity.

Acid-test Ratio

A financial metric that measures a company's ability to pay its current liabilities without relying on the sale of its inventories, calculated by dividing liquid assets by current liabilities.