The Income Velocity of Money

question 29

Multiple Choice

The income velocity of money:

• A)is defined in the identity MV = PY.
• B)is defined in the identity MV = PT.
• C)is the same thing as the transactions velocity of money.
• D)will be smaller than the transactions velocity of money if the quantity of transactions is greater than income.

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Definitions:

Transaction Data

Information collected about each specific activity that takes place within a business, which can be used for various financial and management analysis purposes.

Journal

A daily record of financial transactions, providing a detailed account of all entries for each transaction.

Chart of Accounts

An organized list of all ledger account titles and numbers used by a company, serving as a framework for the recording of financial transactions.

Asset Accounts

Accounts that track the value of the resources owned by a business, which can include cash, inventory, equipment, and real estate.