If the Demand for Real Money Balances Is Proportional to Real

question 21

Multiple Choice

If the demand for real money balances is proportional to real income, velocity will:

• A) increase as income increases.
• B) increase as income decreases.
• C) vary directly with the interest rate.
• D) remain constant.

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Definitions:

Board of Directors

A group of individuals elected by shareholders to oversee the management and make important decisions for a corporation.

Dividend Yield

An indicator in finance measuring the dividends paid by a company each year against its share price.

Annual Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profits, on an annual basis.

Cumulative Voting

A voting system that allows shareholders to concentrate all their votes on one candidate for the board of directors, offering more power to minority shareholders.