If Real GDP Equals 3,500, Nominal GDP Equals 5,250, and the Price

question 48

Multiple Choice

If real GDP equals 3,500, nominal GDP equals 5,250, and the price level equals 1.5, then what is velocity if the money stock equals 2,100?

• A)1.66
• B)2.33
• C)2.5
• D)3

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Definitions:

Price Volatility

The degree of variation in the price of a financial instrument over a certain period, indicating the risk or stability of the asset.

Treasury Notes

Medium-term interest-bearing securities issued by the U.S. government with maturity periods typically between 1 and 10 years.

Commercial Paper

A short-term, unsecured promissory note issued by corporations with high credit ratings to fund immediate operational needs.

Chartered Financial Analyst

A professional designation given by the CFA Institute that measures the competence and integrity of financial analysts.