Velocity Is Computed as

question 107

Multiple Choice

Velocity is computed as

• A)(PY)/M.
• B)(PM)/Y.
• C)(YM)/P.
• D)(YM)/V.

Calculate and understand the implications of the simple spending multiplier based on the marginal propensity to consume and save.

Recognize how changes in the price level influence consumption, exports, and the aggregate demand curve.

Understand the relationship between the marginal propensity to consume (MPC) and the spending multiplier.

Comprehend the role of the price level in defining the aggregate demand and expenditure in an economy.

---

Definitions:

Return On Assets

A financial metric that indicates how profitable a company is relative to its total assets, measuring how efficiently a company uses its assets to generate earnings.

Profit Margin

A financial ratio calculated as net income divided by revenue, indicating the percentage of revenue that is retained as profit after accounting for costs and expenses.

Asset Turnover

A metric indicating how effectively a company utilizes its assets to produce sales income.

Financial Ratio

A numerical comparison derived from a company's financial statements, used to evaluate aspects of its operational efficiency, liquidity, profitability, and solvency.