In an Economy, If the Velocity of Money Is Equal

question 10

Multiple Choice

In an economy, if the velocity of money is equal to 2, the value of real GDP is equal to $300 million, and the price level is 10, then the value of nominal GDP will be equal to:

• A)$3 billion
• B)$1.5 billion
• C)$6 billion.
• D)$600 million
• E)$150 million

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Definitions:

Corporate Bond

A corporate bond is a debt security issued by a corporation to raise funding, which promises to pay back the principal along with interest at a specified maturity date.

Higher Yield

Refers to investments offering a greater return in terms of interest or dividends, often accompanied by higher risk.

Effective Annual Rate

The interest rate on an investment or loan that reflects the actual annual rate of interest, accounting for compounding over a given period.