If Velocity = 5,the Price Level = 2,and the Real

question 47

Multiple Choice

If velocity = 5,the price level = 2,and the real value of output is 2,500,then the quantity of money is

• A)$250.
• B)$25,000.
• C)$1,000.
• D)$6,250.

---

Definitions:

Deductible

An expense that can be subtracted from gross income to reduce the amount of income subject to tax.

More-Than-50% Business-Use Test

A criterion used for determining whether an asset is used primarily for business, requiring that over 50% of its use is for business to qualify for certain tax deductions.

Listed Property

Assets specified by the IRS that are subject to specific record-keeping and substantiation requirements, such as vehicles and computers used for business.

Business Bad Debt

Debt associated with the conduct of a trade or business that becomes worthless or uncollectible during the tax year.