​Equation of Exchange States That the Quantity of Money Multiplied

question 144

Multiple Choice

​equation of exchange states that the quantity of money multiplied by the velocity of money equals:

• A)real Gross Domestic Product.
• B)the price level.
• C)nominal Gross Domestic Product.
• D)the turnover rate.
• E)the demand for money.

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Definitions:

Drawer

The party that writes and signs a cheque, instructing a bank to pay a specific amount of money to the bearer or a named party.

Drawee Bank

The financial institution upon which a check is drawn and is responsible for paying the amount indicated when properly presented.

Stop Payment

An order given by an account holder to their bank to not pay out or honor a check or payment that has previously been issued from their account.

Holder In Due Course

A party possessing a negotiable instrument, like a check, who has certain rights to payment free from most defenses or claims.