If the Amount of Money in Circulation Is $400 Billion

question 135

Multiple Choice

If the amount of money in circulation is $400 billion and the nominal GDP is $800 billion, the velocity of money is

• A) 0.5.
• B) 2.
• C) 4.
• D) 8.

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Definitions:

Abstract Logic

A branch of logic that deals with the study and systematic analysis of abstract forms of argument and reasoning, without necessarily referring to real-world objects.

Everyday Life

Refers to the daily activities, interactions, and routines in which people engage, highlighting the social and cultural meanings infused in the mundane.

Substantive Rationality

A decision-making process that considers the wider impact on society and adheres to ethical, value-based judgments, beyond mere efficiency.

Formal Rationality

A concept in sociology and economics referring to the deliberate and methodical calculation of the most efficient means to achieve a given goal, irrespective of the objective's value or consequence.