The Number of Times Per Year, on Average, That a Dollar

question 29

Multiple Choice

The number of times per year, on average, that a dollar is spent on final goods and services is known as

• A) the money supply.
• B) the equation of exchange.
• C) the price of money.
• D) the income velocity of money.

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Definitions:

Money Supply

The total volume of money available in an economy at a specific time, including cash, coins, and balances held in checking and savings accounts.

Nominal Variable

Refers to a variable measured in monetary terms but not adjusted for inflation, reflecting current prices.

Real Variable

A variable, such as income or output, that has been adjusted for inflation, reflecting true purchasing power.

Recession

A period of temporary economic decline during which trade and industrial activities are reduced, generally identified by a fall in GDP in two successive quarters.