Suppose That M Is Fixed but That P Falls

question 115

Multiple Choice

Suppose that M is fixed but that P falls.According to the quantity equation which of the following could both by themselves explain the decrease in P?

• A)Y rose,V rose
• B)Y fell,V fell
• C)Y rose,V fell
• D)Y fell,V rose

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Definitions:

Operating Expenses

The ongoing costs for running a business, excluding the cost of goods sold, such as rent, utilities, and salaries.

Sales Revenues

The gross revenue is the entire sum of money earned from selling goods or providing services prior to subtracting any expenses or costs.

Imputed Interest Rate

The calculated interest rate used in situations where no actual interest rate is specified or when understanding the opportunity cost of an investment.

Residual Income

The amount of income that exceeds the minimum rate of return expected from a particular investment. It is often used as a measure of the performance of an investment or a division within a company.