The Quantity of Money Is $1 Billion, the Price Level

question 290

Short Answer

The quantity of money is $1 billion, the price level is 1.10, and real GDP is $10 billion. What is the velocity of circulation?

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Definitions:

Production Order Quantity

The optimum quantity of goods a company should order for production which minimizes total inventory costs.

Retail Inventory

The total value of goods available for sale at a retail location, including items on the sales floor and in stock.

Shrinkage

Retail inventory that is unaccounted for between receipt and sale.

Economic Order Quantity

The ideal order quantity a company should purchase to minimize its inventory costs, including holding, setup, and shortage costs.