It Has Been Shown That Increases in the Money Supply

question 96

Multiple Choice

It has been shown that increases in the money supply are directly related to the rate of inflation.If the previous statement is true,then

• A) nations that increase their money supplies most rapidly will be the most prosperous.
• B) hyperinflation will normally be associated with large increases in the money supply.
• C) hyperinflation will normally be associated with large decreases in the money supply.
• D) menu costs will rise when the money supply falls.
• E) real wages rise whenever the money supply increases.

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Definitions:

Beginning Inventory

The value of all inventory held by a company at the start of an accounting period, which includes raw materials, work-in-progress, and finished goods.

Merchandise Purchases

The acquisition of goods that a company intends to sell in its normal course of business; this includes goods bought for resale.

Cost Of Goods

The total direct costs attributable to the production of the goods sold by a company.

Budgeted Sales

Projected or estimated sales for a future period, usually based on past sales data, market analysis, and growth projections.