The ratio of nominal GDP to the stock of money is the
A) money multiplier.
B) velocity of money.
C) real GDP.
D) GDP deflator.

Question

Quizplus · Accepted Answer

The ratio of nominal GDP to the stock of money is a measure of how quickly money is circulating through the economy, which is known as the velocity of money. The money multiplier is a measure of the amount by which the money supply is increased by a given increase in reserves. Real GDP is a measure of the value of goods and services produced in an economy, adjusted for inflation. The GDP deflator is a measure of the level of prices in an economy, calculated as the ratio of nominal GDP to real GDP.

The Ratio of Nominal GDP to the Stock of Money