If the actual price level is lower than the expected price level, ...

[littleanan]

If the actual price level is lower than the expected price level, the economy will contract in the short run.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 2

The velocity of money is defined as:
 a. the time it takes the average worker to get to the bank with his/her paycheck.
 b. the time it takes banks to clear checks.
 c. the average number of times per year each dollar is used to purchase final goods and services.
 d. the ratio of money supply to the average price level in an economy.
 e. the average number of times per year each dollar is spent for goods, payrolls, Social Security payments, etc.

[miss.ashley]

Answer to Question 1

True

Answer to Question 2

c