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.

Question

Quizplus · Accepted Answer

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 velocity. Option A is incorrect because Gross National Product (GNP) is the total value of all final goods and services produced by a country's residents, regardless of their location, in a specific period. Option B is incorrect because the spending multiplier is a measure of the increase in spending that occurs when there is an injection of new funds into the economy, such as government spending or investment. Option C is incorrect because the money multiplier is the amount by which the money supply is increased by each additional unit of reserves held by banks.

The Average Number of Times That a Dollar Is Spent