If the Nominal GDP Is $477 Billion and the Velocity

question 16

Multiple Choice

If the nominal GDP is $477 billion and the velocity of money is 4.5, then the money supply is

• A) $122 billion.
• B) $98 billion.
• C) $106 billion.
• D) $477 billion.

---

Definitions:

Constant Returns to Scale

A condition where increasing all inputs by the same proportion results in an increase in output by that same proportion.

Minimum Efficient Scale

The smallest level of production at which long-run total average costs are minimized.

Diseconomies of Scale

A situation where a company or organization grows so large that the costs per unit increase, leading to reduced efficiency.

Long-run Average Total Cost

Represents the average cost per unit of output in the long-term, where all inputs are variable, allowing for the adjustment of all factors of production.