642 $
© 2014 Pearson Canada Inc.$
The velocity of money is defined as ____.
A) real GDP divided by the money supply
B) nominal GDP divided by the money supply
C) real GDP times the money supply
D) nominal GDP times the money supply
Answer: B
Diff: 2 Type: MC Page Ref: 526
Skill: Recall
Objective List: 21.1 Describe how the demand for money is determined
The equation of exchange states that the quantity of money multiplied by the number of
times this money is spent in a given year must equal ____.
A) nominal income
B) real income
C) real gross national product
D) velocity
Answer: A
Diff: 2 Type: MC Page Ref: 526
Skill: Recall
Objective List: 21.1 Describe how the demand for money is determined
In the equation of exchange, the concept that provides the link between M and PY is called
____.
A) the velocity of money
B) aggregate demand
C) aggregate supply
D) the money multiplier
Answer: A
Diff: 2 Type: MC Page Ref: 526
Skill: Recall
Objective List: 21.1 Describe how the demand for money is determined
The equation of exchange is ____.
A) M × P = V × Y
B) M + V = P + Y
C) M + Y = V + P
D) M × V = P × Y
Answer: D
Diff: 2 Type: MC Page Ref: 526
Skill: Recall
Objective List: 21.1 Describe how the demand for money is determined