Using the Equation of Exchange, If the Nominal GDP Is

question 130

Multiple Choice

Using the equation of exchange, if the nominal GDP is $8,000 billion and the money supply is $1,600 billion, then

• A) the price level is 5.0.
• B) the price level is 0.2.
• C) velocity is 5.0.
• D) velocity is 0.2.

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Definitions:

Useful Life

The estimated period over which an asset is expected to be usable by the owner.

Straight-Line Method

A depreciation method where an asset's cost is evenly spread across its useful life, resulting in equal depreciation expenses each period.

Accumulated Depreciation

This represents the total amount of depreciation expense that has been charged against a fixed asset since it was put into use.

Salvage Value

The approximate salvage worth of an asset at its lifespan's conclusion.