Does the currency in circulation equal the annual production of goods and services?
The amount of currency in circulation does not equal the annual production of goods and services in a country. It is usually much smaller. 

For example, as of July 2013, currency in circulation—that is, U.S. coins and paper currency in the hands of the public—totaled about $1.2 trillion dollars.

In contrast the U.S. GDP for the same year was about $17 trillion dollars.

You can find more information on how Fed prints currency to meet demand from this Fed article.