Use the Information Below to Answer the Following Question

question 21

Multiple Choice

Use the information below to answer the following question.
Fact 24.1.1
The information describes a hypothetical banking system. Assume that all banks are holding their desired reserves.

-Refer to Fact 24.1.1. The quantity of money as measured by M1 is equal to

• A)$2,500.
• B)$1,500.
• C)$6,500.
• D)$7,000.
• E)$6,000.

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Definitions:

Direct Labor-Hours

Direct labor-hours refer to the total hours worked by employees directly involved in the production process, used as a basis for allocating labor costs to products.

Machine-Hours

The total hours that machinery is operated during a specific period for production purposes.

Departmental Predetermined Overhead Rates

These rates are calculated to allocate manufacturing overhead costs to specific departments, based on estimated or actual overhead and activity levels.

Machine-Hours

A measure of production time using machinery; used as a basis for allocating manufacturing overhead costs to products.