Given Constant Velocity and Output, the Notion That Prices Rise

question 17

Multiple Choice

Given constant velocity and output, the notion that prices rise when more money is created:

• A) is known as the natural rate theory
• B) was first explained by Milton Friedman
• C) is known as the Fisher effect of money
• D) is known as the quantity theory of money

---

Definitions:

Quick Ratio

A liquidity measure that indicates a company's ability to cover its short-term liabilities with its most liquid assets.

Days Sales In Inventory

A financial metric indicating the average time it takes for a company to turn its inventory into sales, reflecting inventory management efficiency.

Days To Pay Payables

An accounting metric that calculates the average number of days it takes a company to pay its invoices from suppliers, indicating how effectively a company is managing its outgoing cash flow.

Quick Ratio

A measure of a company's ability to meet its short-term obligations with its most liquid assets, calculated as (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities.