The velocity of money is defined as:
a. the time it takes the average worker to get to the bank with his/her paycheck
b. the time it takes banks to clear checks.
c. the average number of times per year each dollar is used to purchase final goods and services.
d. the ratio of money supply to the average price level in an economy.
e. the average number of times per year each dollar is spent for goods, payrolls, Social Security payments, etc.
c
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
When external benefits are present,
A) competitive markets are efficient. B) competitive markets are inefficient. C) a tax is required to eliminate the inefficiency. D) property rights have already been established.
Governments establish price floors when it is believed the market equilibrium price is too high
Indicate whether the statement is true or false
Which is the most accurate statement?
A. Our trade problems with Japan and China are very similar. B. Japanese markets have been at least somewhat closed to imports. C. If Japan and China traded fairly, our trade deficits with those two countries would disappear. D. Our trade deficits with Japan and China account for almost our entire trade deficit.