CFA Practice Question

There are 341 practice questions for this study session.

CFA Practice Question

The equation of exchange states that ______
A. money supply multiplied by nominal GDP equals velocity.
B. velocity multiplied by money supply equals nominal GDP.
C. money supply divided by velocity equals real GDP.
Explanation: The equation of exchange implies that when the existing money stock (M) is multiplied by the number of times (V) that money is used to buy final products, this yields the economy's nominal GDP (or output times the price level).

User Contributed Comments 2

User Comment
matzaala you knew this one; dont second-guess yourself!!!
Nominal GDP = Output X Price Level
copus piece of cake!
You need to log in first to add your comment.