If velocity is equal to 1, this means that
A. each dollar of the money supply is spent on the average one time per year.
B. an increase in the money supply will lead to an increase in aggregate supply of 1.
C. for every 2 dollars of the money supply, nominal Gross Domestic Product (GDP) will increase by 1.
D. the rate of growth of the money supply is 1.
Answer: A
You might also like to view...
Absolute advantage
a. is the same as comparative advantage b. implies autarky c. means that countries of the same size have the same opportunity cost of producing both goods d. means that a country can produce more of two goods than another country can e. means that a country can produce less of two goods than another country can
You withdraw $100 from your checking account. How does this affect the money supply and the reserves of your bank?
a. The money supply increases, and the reserves of your bank decline. b. Both money supply and the reserves of your bank increase. c. There is no change in the money supply, and the reserves of your bank decline. d. The money supply decreases, and the reserves of your bank increase.
The velocity of money measures the
A. proportion of the money supply which is held as an asset. B. ratio of the transactions demand to the asset demand for money. C. average annual rate of increase in the money supply. D. number of times per year the average dollar is spent on final goods and services.
Which of the following types of employment is inevitable whenever an employee loses his or her job?
a. cyclical b. frictional c. seasonal d. structural