If a Certain Household Earns and Spends $24,000 Per Year

question 185

Multiple Choice

If a certain household earns and spends $24,000 per year and, on the average, holds a money balance of $6,000, then the velocity of money for this household is

• A)6.
• B)1/6.
• C)4.
• D)1/4.

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Definitions:

Dividend

A portion of a company's earnings distributed to shareholders, often in the form of cash or additional shares.

Variance

A statistical measure that represents the average squared deviation from the mean, used to indicate the spread of a set of data points.

Returns

The profit or loss generated on an investment over a particular period, typically expressed as a percentage of the investment's initial cost.

Annual Coupon Bond

A bond that pays interest to the holder annually until its maturity, at which point the principal is repaid.