The Equation of Exchange States That the Quantity of Money

question 115

Multiple Choice

The 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:

Income Elasticity of Demand

A metric that gauges the sensitivity of demand for a product to shifts in the income of consumers.

Weekly Income

The total amount of earnings received by an individual or entity over the span of a week.

Bars of Chocolate

Solid blocks of chocolate that can vary in cocoa content, sweetness, and added ingredients, enjoyed as confectionary treats.

Change in Income

The variation, either increase or decrease, in the amount of money earned by individuals or households over time.