According to the Equation of Exchange, If the Quantity of Money

question 31

Multiple Choice

According to the equation of exchange, if the quantity of money is $4 billion and the velocity of circulation is 3, nominal GDP is

• A) $12 billion.
• B) $7 billion.
• C) $1.3 billion.
• D) $0.75 billion.
• E) $8 billion.

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Definitions:

Recognition

Recognition in accounting refers to the formal acknowledgment of a transaction or event in the financial statements, often involving the recording of revenue or expense.

Expense

Costs incurred by a business in the process of earning revenues.

Deferral Adjusting Entry

An accounting entry made to defer revenue or expense to a future period.

Unearned Revenue

Money received by a business for services or products yet to be delivered or completed.