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© 2014 Pearson Canada Inc.$
The average number of times that a dollar is spent in buying the total amount of final goods
and services produced during a given time period is known as ____.
A) gross national product
B) the spending multiplier
C) the money multiplier
D) velocity
Answer: D
Diff: 1 Type: MC Page Ref: 526
Skill: Recall
Objective List: 21.1 Describe how the demand for money is determined
Because the quantity theory of money tells us how much money is held for a given amount of
aggregate income, it is also a theory of ____.
A) interest-rate determination
B) the demand for money
C) exchange-rate determination
D) the demand for assets
Answer: B
Diff: 1 Type: MC Page Ref: 527
Skill: Recall
Objective List: 21.1 Describe how the demand for money is determined
The velocity of money is ____.
A) the average number of times that a dollar is spent in buying the total amount of final goods
and services
B) the ratio of the money stock to high-powered money
C) the ratio of the money stock to interest rates
D) the average number of times a dollar is spent in buying financial assets
Answer: A
Diff: 1 Type: MC Page Ref: 526
Skill: Recall
Objective List: 21.1 Describe how the demand for money is determined
If the money supply is $600 and nominal income is $3,000, the velocity of money is
____.
A) 1/50
B) 1/5
C) 5
D) 50
Answer: C
Diff: 2 Type: MC Page Ref: 526
Skill: Applied
Objective List: 21.1 Describe how the demand for money is determined