If the Money Supply Is $1,000,the Price Level Is 3,and

question 67

Multiple Choice

If the money supply is $1,000,the price level is 3,and real income (or output) is $5,000,then the velocity of money is _____.

• A)0.2
• B)0.6
• C)1.67
• D)5
• E)15

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Definitions:

Residual Claimants

Individuals or entities entitled to a share of a company's profits after all obligations have been met.

Team Production

A production process in which employees work together under the supervision of the owner or the owner’s representative.

Contracting Out

The practice of hiring external organizations or individuals to perform services or create goods that were previously done in-house.

Principal Agent Problem

A dilemma in economics and organizational theory where one party (the agent) is supposed to act in the best interest of another party (the principal) but might act in their own interest instead.