If people wished to hold a quantity of money equal to 80% of nominal GDP, the velocity of money would be
A) 1.00.
B) 1.25.
C) 1.50.
D) 1.75.
Ans: B) 1.25.
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Which of the following statements is true of market prices in a perfectly competitive market?
A) Market prices are determined by the government. B) Market prices allow for efficient allocation of scarce resources. C) Market prices are not stable and fluctuate widely. D) Market prices do not act as incentives for buyers.
What is the underground economy? How does it affect GDP calculations? Provide three examples of underground economy transactions
Rent ceiling
What will be an ideal response?
A fashion fad significantly increases the demand for fedora hats. Which of the following would most likely be the result?
a. The price of fedoras would plummet. b. The production of fedoras would decline. c. Sellers would discount the price of their existing supply of fedoras. d. Buyers would compete fiercely to buy a limited quantity of fedoras.