If Money Supply Is $800 Billion and Nominal GDP Is

question 201

Multiple Choice

If money supply is $800 billion and nominal GDP is $2 trillion, then the average number of times that money is spent and changes hands is

• A) 2.5 times per year.
• B) 2 times per year.
• C) 1.6 times per year.
• D) 16 times per year.

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Definitions:

Equity Investments

Investments in shares of companies with the aim of earning dividends or selling the shares at a higher price.

Non-strategic Investments

Investments not central to a company's business model or core mission, often made for diversification or income generation purposes rather than long-term strategic initiatives.

Investment in Associates

A financial interest held in another company that gives the investor significant influence, typically reflected by ownership of 20% to 50% of the voting stock.

Unrealized Gain

An increase in the value of an asset that has not been sold, hence the gain is not reflected in the financial statements as actual profit.