If Real GDP Is $200, the Price Level Is 2

question 19

Multiple Choice

If real GDP is $200, the price level is 2.5, and velocity is 5, then the quantity of money is

• A) $200.
• B) $100.
• C) $750.
• D) $1,000.
• E) $500.

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Definitions:

Policymakers

Individuals or groups responsible for making decisions and establishing regulations that guide the economic, social, and political governance of a society.

Marginal Benefit

The plus in satisfaction or usefulness someone gets by consuming an extra unit of a given product or service.

Socially Optimal

A situation in economics where resources are allocated in the most efficient way from a societal perspective.

Pigouvian Tax

A tax imposed on activities that generate negative externalities, intended to correct an undesirable or inefficient market outcome by being equal in value to the externality.