1. The velocity of money is: A. The time lag from when the money supply is increased until the effect takes place. B. The time it takes to produce money. C. An annual percentage change in the consumer price index. D. The number of times per year a dollar is spent on final goods and services. 2. Inflation is: A. A rise in the value of money B. A persistent rise in average prices. C. A sustained increase in wages. D. None of the above. 3. If the economy goes into a contraction, A. Additional unemployment is cyclical unemployed. B. The economy is working overtime. C. There is no frictional, structural, or seasonal unemployment. D. Real GDP rises above potential GDP. 4. Deflation benefits A. All producers. B. Borrowers. C. Savers. D. All consumers