The Velocity of Money Measures the Rate of Circulation of the Money

question 81

Multiple Choice

The velocity of money measures the rate of circulation of the money supply and can be expressed by the following equation (note: GDP = gross domestic product and MS = money supply) :

• A)VM = GDP/MS
• B)VM = MS/GDP
• C)VM = MS x GDP
• D)all of the above
• E)none of the above

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Definitions:

Financial Budgets

Plans that predict revenues, expenses, and cash flows over a specific period, helping businesses allocate resources and manage finances effectively.

Operating Budgets

Comprehensive financial plans used by an organization to forecast its expected revenues and expenses for a future period, guiding daily operations.

Budgeted Volume

The anticipated quantity or amount of sales, production, or activity planned for a future period.

Ending Inventory

The value of goods available for sale at the end of an accounting period.