According to the Equation of Exchange,if Real GDP Is $2

question 6

Multiple Choice

According to the equation of exchange,if real GDP is $2 trillion and the money supply is $0.5 trillion,the velocity of money:

• A)must be 4.
• B)must be 1/4.
• C)must be 4 trillion.
• D)must be 1/4 trillion.
• E)cannot be determined unless we know the price level.

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Definitions:

Net Operating Income

A company's income after operating expenses are deducted, but before income taxes and interest are deducted.

Average Operating Assets

The average value of the assets used in the normal operating activities of a business over a specific period.

Return On Investment

A measure of the profitability of an investment, calculated as a percentage of the return divided by the cost of the investment.

Return On Investment

A metric to assess the effectiveness or profit generated by an investment in comparison to its expense.