When the velocity of circulation equals 4 in 2010, this fact means that
A) consumers held four dollars in wealth for each dollar they spent in 2010.
B) on average, each dollar of money in the economy purchased four dollars of goods and services in GDP in 2010.
C) for each additional dollar of money injected into the economy, the price level rose 4 percent in 2010.
D) real output of goods and services in GDP rose by four dollars for each additional dollar of money consumers saved.
B
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Which of the following best explains why the federal tax rebates in 2008 and 2009 had almost no effects on aggregate demand?
A) According to Ricardian equivalence theorem, those tax rebates did not affect aggregate demand because they were accompanied by more government spending. B) According to the permanent income hypothesis, those one-time tax rebates did not affect consumption because taxpayers did not believe the rebates would occur. C) According to Ricardian equivalence theorem, those tax rebates did not affect aggregate demand because there were no direct expenditure offsets. D) According to the permanent income hypothesis, those one-time tax rebates did not affect consumption because they did not change taxpayers' permanent income.
The Fisherian version of the quantity theory equation is a. MV = Py. b y = c + i + g
c. M = kPy. d. s = i + (g – t).
The economic way of thinking will help you
A. make decisions in financing your home. B. make better decisions concerning your education. C. analyze solutions to economic problems. D. all of these
How are the fundamental economic questions answered in a market economy?
A) The government alone decides the answers. B) Individuals, firms, and the government interact in markets to decide the answers to these questions. C) Households and firms interact in markets to decide the answers to these questions. D) Large corporations alone decide the answers.