The term velocity of money refers to:
The speed at which money changes hands in an economy
The total amount of money in circulation in an economy
The total amount of money held by households and businesses
The total amount of money held by banks as reserves
Correct Answer :
A. The speed at which money changes hands in an economy
Related Questions
The term sticky prices refers to:
Prices that do not change quickly in response to changes in supply and demand
Prices that are set by the government and cannot be changed by firms
Prices that are adjusted continuously in response to changes in the economy
Prices that are set by monopolies to maximize profit
The concept of crowding out refers to:
The decrease in private spending that occurs as a result of an increase in government spending
The increase in private investment that occurs as a result of government borrowing
The decrease in government spending that occurs during a recession
The increase in government spending that occurs during a boom
The term commodity bundle in economics refers to:
A collection of goods and services used to calculate inflation
A collection of goods and services that a consumer typically buys
A collection of goods and services used to calculate GDP
A collection of goods and services produced in a specific industry
The term complementary input refers to inputs that are:
Used together in the production process
Used interchangeably in the production process
Completely unrelated in the production process
Unrelated to the production process
The term supply-side economics focuses on:
Policies that aim to increase aggregate demand in the economy
Policies that aim to increase the productive capacity of the economy
Policies that aim to control inflation through monetary policy
Policies that aim to control inflation through fiscal policy
The term Phillips curve depicts the relationship between:
Inflation and unemployment
Government spending and taxes
Savings and investment
Consumption and income
The term inflationary gap refers to a situation where:
Actual output is less than potential output
Actual output is greater than potential output
The inflation rate is high
The unemployment rate is low
The term real interest rate is:
The nominal interest rate adjusted for inflation
The interest rate charged by banks on loans
The interest rate earned on a savings account
The interest rate set by the central bank
The term monetary base refers to:
The total amount of money in circulation in an economy
The total amount of money held by banks as reserves
The total amount of money held by households and businesses
The total amount of money created by the central bank
The term monetary policy refers to:
Central bank policies related to interest rates and money supply to influence the economy
Government policies related to taxation and spending to influence the economy
Policies aimed at regulating international trade
Policies related to the regulation of financial markets
The term open market operations refer to:
The buying and selling of government securities by the central bank to influence the money supply
The buying and selling of goods and services in international markets
The buying and selling of stocks in the stock market
The buying and selling of consumer goods in a free market economy
The term price elasticity of supply measures:
The responsiveness of quantity supplied to changes in price
The responsiveness of quantity demanded to changes in price
The responsiveness of consumer preferences to changes in price
The responsiveness of production costs to changes in price
The term velocity of money refers to:
The speed at which money changes hands in an economy
The total amount of money in circulation in an economy
The total amount of money held by households and businesses
The total amount of money held by banks as reserves
If the government implements expansionary fiscal policy, it will likely lead to:
Higher inflation and higher economic growth
Lower inflation and lower economic growth
Higher inflation and lower economic growth
Lower inflation and higher economic growth
If the government decreases taxes and increases government spending, it is implementing:
Expansionary fiscal policy
Contractionary fiscal policy
Expansionary monetary policy
Contractionary monetary policy
The money supply is primarily determined by:
The Federal Reserve
Commercial banks
The Treasury Department
The President of the United States
The term Laffer curve is used to illustrate the relationship between:
Tax rates and tax revenue
Government spending and economic growth
Inflation and unemployment
Interest rates and investment
The term trade surplus occurs when:
Exports exceed imports
Imports exceed exports
Both exports and imports are equal
Both exports and imports are zero
The term monetary policy transmission mechanism refers to:
The process through which changes in monetary policy affect the overall level of economic activity
The process through which changes in fiscal policy affect the overall level of economic activity
The process through which changes in exchange rates affect the overall level of economic activity
The process through which changes in international trade affect the overall level of economic activity
The term marginal revenue refers to:
The additional revenue earned from producing one more unit of a good or service
The total revenue earned by a firm
The total cost of producing a given quantity of a good or service
The additional cost of producing one more unit of a good or service
The term ceteris paribus means:
All else equal
Let the buyer beware
Supply creates its own demand
The invisible hand
The term economic rent refers to:
Payment for the use of land or other natural resources that is in excess of what is needed to bring the resource into production
The payment for the use of capital goods in production
The total revenue earned by a firm
The total cost of producing a good or service
The term equilibrium level of income is determined by the intersection of:
Aggregate demand and aggregate supply
Consumption and saving
Investment and government spending
Taxes and transfers
If the government runs a budget deficit, it means that:
Government spending exceeds government revenue
Government revenue exceeds government spending
Government revenue and spending are equal
Taxes are too high
If the economy is in a recessionary gap, it implies that:
Actual output is less than potential output
Actual output is greater than potential output
The inflation rate is high
The unemployment rate is low
The term structural deficit refers to a deficit that exists even when the economy is operating at:
Full employment
Below full employment
A recessionary gap
An inflationary gap
If the government increases taxes and decreases government spending, it is implementing:
Contractionary fiscal policy
Expansionary fiscal policy
Contractionary monetary policy
Expansionary monetary policy
The aggregate demand curve shows the relationship between:
The price level and the quantity of real GDP demanded
The interest rate and investment spending
The price level and the quantity of money demanded
The exchange rate and net exports
Which of the following is a measure of the responsiveness of quantity demanded to a change in price?
Price elasticity of demand
Cross-price elasticity of demand
Income elasticity of demand
Price elasticity of supply
The term marginal propensity to save (MPS) refers to:
The change in saving resulting from a change in disposable income
The total amount of saving in an economy
The change in consumption resulting from a change in disposable income
The total amount of consumption in an economy