If an Economy Produces 2,000 Units of Output When the Price

question 145

Multiple Choice

If an economy produces 2,000 units of output when the price level is $2 and the money supply is $1,000, what is the velocity of money?

• A) 4
• B) 500
• C) 1
• D) 2

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Definitions:

Casting Department

A functional area in a manufacturing facility where materials are poured into molds to form parts or products.

Finishing Department

The final stage in the manufacturing process where products are completed, assembled, painted, or treated before sale.

Predetermined Overhead Rate

A rate calculated at the beginning of a period, used to allocate manufacturing overhead to products based on a particular activity base, such as machine hours or labor hours.

Machine-Hours

A measure of production output or activity based on the hours that machinery is operational.