In a Small Economy, the Quantity of Money Circulating in the Economy

question 111

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 price level is 2. What is the velocity of money?

• A) 4
• B) 2
• C) 2.5
• D) 5

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Definitions:

Basalt

A dark, fine-grained volcanic rock that is formed from the rapid cooling of basaltic lava exposed at or very near the surface of a planet.

Sedimentary Terrain

Areas dominated by sedimentary rocks, which are formed from the accumulation and lithification of mineral and organic particles over time.

Youngest

This term refers to the most recently formed or last in a sequence, often used in contexts related to geologic formations or the age of geological layers.

Plutoid

A class of dwarf planet farther from the Sun than the orbit of Neptune.