In Words, the Equation of Exchange Says That

question 132

Multiple Choice

In words, the equation of exchange says that

• A) the total amount spent on final output equals the amount received for final output.
• B) the amount of money in circulation equals the velocity of the price level.
• C) changes in the money supply will have no impact on the amount spent on final output.
• D) when velocity equals 1, nominal GDP equals the price level.

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Definitions:

Nonpolar

A type of covalent bond where electrons are shared equally between atoms, leading to a molecule that does not have distinct poles or charges.

Glycogen

The principal storage polysaccharide in animal cells; formed from glucose and stored primarily in the liver and, to a lesser extent, in muscle cells

Cellulose

A structural polysaccharide consisting of beta glucose subunits; the main constituent of plant primary cell walls.

Starch

A polysaccharide composed of alpha glucose subunits; made by plants for energy storage.