If the Velocity of Circulation Was Equal to 4 in 2017

question 244

Multiple Choice

If the velocity of circulation was equal to 4 in 2017, it means that

• A) consumers held four dollars in wealth for each dollar they spent in 2017.
• B) on average, each dollar of money in the economy purchased four dollars of goods and services in GDP in 2017.
• C) for each additional dollar of money injected into the economy, the price level rose 4 percent in 2017.
• D) real output of goods and services in GDP rose by four dollars for each additional dollar of money consumers saved.

Recognize the treatment of gains and losses on investments and their impact on financial statements.

Identify the characteristics and reporting requirements for different types of securities.

Understand the key principles of accounting for investments and the rationale behind using fair value or cost methods.

Identify the classifications of investments on the balance sheet and their treatment according to GAAP.

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Definitions:

Information Outputs

The resulting data or information that is produced from a process or system.

Timely And Accurate

Describes information or processes that are delivered or completed within an expected time frame and with precision or correctness.

Accounting Information System

A system consisting of people, processes, and technology that manages financial data and supports business decisions.

Cost Effectiveness

An evaluation measure to determine how effectively a party is achieving its objectives relative to the costs incurred.