Dividing Nominal Gross Domestic Product (GDP) by the Money Supply

question 70

Multiple Choice

Dividing nominal gross domestic product (GDP) by the money supply (M) is a way to obtain the:

• A) Velocity of money
• B) Monetary multiplier
• C) Equation of exchange
• D) Monetary rule

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Definitions:

Phillips Curve

An economic theory that suggests an inverse relationship between rates of unemployment and corresponding rates of inflation.

Money Supply

Refers to the total amount of money available in an economy at a specific time, including cash, coins, and balances held in checking and savings accounts.

Money Supply Growth

The rate at which the amount of money available in an economy increases over a specific period of time.

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power over time.