If an Economy Has a Velocity of Circulation of 3

question 253

Multiple Choice

If an economy has a velocity of circulation of 3, then

• A) the quantity of money is 3 times real GDP.
• B) in a year the average dollar is exchanged 3 times to purchase goods and services in GDP.
• C) nominal GDP is 1/3 the size of the quantity of money.
• D) the quantity of money is $3 for every dollar of GDP.

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Definitions:

Group Polarisation

The tendency for a group to make decisions that are more extreme than the initial inclination of its members.

Intergroup Attribution

Process of assigning the cause of one’s own or others’ behaviour to group membership.

Ultimate Attribution Error

A cognitive bias where people attribute the positive behaviors of their own group to stable, internal characteristics and negative behaviors of out-groups to their inherent characteristics.

Ingroup Behaviour

Actions and norms exhibited by members within their own group, often characterized by solidarity and loyalty.