If Velocity = 5, the Price Level = 1

question 348

Multiple Choice

If velocity = 5, the price level = 1.5, and the real value of output is 2,500, then the quantity of money is

• A)333.33.
• B)750.00.
• C)1,050.00.
• D)8,333.33.

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Definitions:

Aggregate Demand

The total demand for all goods and services within an economy at a given overall price level and in a given time period.

Individual Demand

The quantity of a good or service that a single consumer is willing and able to purchase at various prices.

Damaged Goods

Products that have been impaired or harmed in some way, reducing their value, usefulness, or appeal.

High Margins

Refers to a significant difference between the cost of goods sold and the selling price, leading to high profits.