According to the Equation of Exchange, If Real Gross Domestic

question 168

Multiple Choice

According to the equation of exchange, if real Gross Domestic Product (GDP) , in base year dollars, is $25 billion, the money supply is $1 billion, and the price index equals 2, then the income velocity of money is

• A) 5.
• B) 10.
• C) 25.
• D) 50.

---

Definitions:

Net Income

A company's overall profit after subtracting expenses and taxes from its revenue.

Manufacturing Margin

The difference between the sales revenue generated from manufactured goods and the cost of goods sold, reflecting the profitability of the manufacturing operations.

Variable Costing

A costing method that includes only variable manufacturing costs - direct materials, direct labor, and variable manufacturing overhead - in product costs.

Variable Cost

Variable costs are expenses that vary directly with the level of production or sales volume.