If nominal GDP is $7,700 billion and M1 is $1,000 billion, then velocity is
A. 10.7.
B. 7.7.
C. 7.1.
D. 7.0.
Answer: B
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With velocity constant and equal to 2, a $10 billion increase in the money supply shifts the LM curve to the right by
A) $2 billion. B) $5 billion. C) $10 billion. D) $20 billion.
A perfectly competitive firm incurs a loss in the short run, if at the profit maximizing level of output:
a. the marginal revenue curve lies below the marginal cost curve. b. the marginal revenue curve lies above the average revenue curve. c. the average cost curve lies below the average revenue curve. d. the average revenue curve lies below the average cost curve. e. the marginal revenue curve lies above the marginal cost curve.
A price system is considered to be efficient when
A) it fails to have the goods that consumers want. B) an underground market develops. C) all resources are allocated to the highest-valued uses. D) firms produce more than what consumers want.
A bank has an 8 percent reserve requirement, $10,000 in deposits, and has loaned out all it can given the reserve requirement
a. It has $80 in reserves and $9,920 in loans. b. It has $800 in reserves and $9,200 in loans. c. It has $1,250 in reserves and $8,750 in loans. d. None of the above is correct.