Using the Equation of Exchange, If the Money Supply Is

question 250

Multiple Choice

Using the equation of exchange, if the money supply is $4 trillion, the price level is 2, and the level of output (real GDP) is $6 trillion, then the velocity of money is

• A) 1.33.
• B) 2.
• C) 3.
• D) 12.

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Definitions:

Investors

Individuals or institutions that allocate capital with the expectation of receiving financial returns.

Indirect Expenses

Costs that are not directly traceable to a specific product or operation, such as utilities or administrative salaries.

Secondary Equity Offering

The issuance of new stock for sale to the public by a company that has already undergone an initial public offering (IPO).