Description
answer all qs pl
Unformatted Attachment Preview
Purchase answer to see full attachment
Explanation & Answer
Attached.
Student’s Name
Lecture’s Name
Course Name
Date
1. The equation of exchange is written as
a. M x V = P x Y.
b. M x P = V x Y.
c. M x Y = P x V.
d. M x Y = Y x P.
Ans;. a. M x V = P x Y.
2. Velocity can be calculated as the ratio of the value of transactions to
a. the price level.
b. level of real GDP.
c. the money stock.
d. the inflation rate.
Ans: C
3. In 2009, nominal GDP was $14,050 billion and M1 was $1,587 billion. Velocity was
a. 0.11.
b. 8.85.
c. 11.30.
d. 14.25.
Ans; B
4. The speed with which money circulates through the economy is called the
a. oversimplified multiplier.
b. velocity of circulation.
c. exchange rate.
d. money multiplier.
Ans; B
5. If nominal GDP is 8,100 billion florins and the money supply is 900 billion florins,
the velocity of circulation is
a. 900.0.
b. 90.0.
c. 81.0.
d. 9.0.
Ans; D
6. Nominal GDP is proportional to money stock when
a. velocity of money is volatile.
b. velocity of money is constant.
c. there are major changes in the value of velocity of money.
d. velocity of money is zero.
Ans: B
7. Velocity can be computed with the formula
a. (Annual spending)/(Money supply).
b. (Annual income)/(Annual spending).
c. (Average income)/(Average spending).
d. (Money supply)/(Average income).
Ans; A
8. Following an anticapitalist coup, Freedonia forces all citizens to turn in and stop using
all credit cards. What is the most likely effec...