If an Economy Produces 1,000 Units of Output with a Price

question 104

Multiple Choice

If an economy produces 1,000 units of output with a price level of $5 and the money supply (M) is $1,000, velocity is:

• A) 5.
• B) 200.
• C) 50.
• D) 2.

---

Definitions:

Trade Surplus

A Trade Surplus occurs when the value of a country's exports exceeds the value of its imports within a certain period.

Trade Deficit

A situation where a country's imports exceed its exports.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than others, leading to specialized trade benefits.

Special Natural Endowment

Unique natural resources or advantages that a country or region possesses, which can provide a competitive edge in certain industries or sectors.