# Money and Value of Money

## Under normal circumstances, the velocity of circulation of money in a country is:

A. 100% B.Negative C.Less than 10 D.Zero

## In the equation PY = MV showing quantity theory of money. Y represents:

A. Year of measurement of national income B.National income C.Tax revenue of the govt. D.(a) and (c) of above

## In Pakistan, in the year 2007-08, money supply was about

A. Rs. 3400 million B.Rs. 3400 billion C.Rs. 3400 trillion D.Uncountable

## Paper money is called fiat money because

A. It is issued with authority of government B.It is convertible into gold C.It can be easily printed D.It is light weight

## According to Keynes, demand for money is affected by:

A. Income B.Rate of interest C.Literacy rate D.Both (a) & (b)

## During inflation:

A. Lenders lose, borrowers gain B.Borrowers lose, lenders gain C.Borrowers and lenders both lose D.All sections of the society gain

## The quantity demanded of money rises:

A. As the interest rises B.As the interest rate falls C.As the supply of money falls D.As the number of banks rises

## Purchasing power of money during deflation is:

A. Reduced B.Increased C.Constant D.Fluctuating

## Which people are most likely to gain during inflation?

A. Those living on pension B.Those living on their savings C.Those who are repaying borrowed money D.Those who have lent money

## Velocity of circulation of money means the number of times a unit of money

A. Changes hands daily B.Changes hands monthly C.Changes hands annually D.Changes purchasing power