Velocity Measures

question 88

Multiple Choice

Velocity measures

• A)the average length of time that people hold wealth
• B)how fast aggregate spending will increase for a given decline in money demand
• C)how fast inflation will rise for a given increase in the money supply
• D)how quickly money changes hands
• E)how quickly banks can create money

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Definitions:

Journal Entry

A record in the books of accounts that represents a single financial transaction, documented in chronological order and showing the debits and credits for each transaction.

Terms N/30

Payment terms indicating that an invoice must be paid within 30 days of the invoice date.

Allowance Method

An accounting technique used to account for bad debts, estimating and setting aside a portion of accounts receivable that may not be collectible.

Percent of Sales Method

A financial forecasting model that estimates future elements of a financial statement as a percentage of sales.