According to the Equation of Exchange,if Real GDP Is $3

question 120

Multiple Choice

According to the equation of exchange,if Real GDP is $3 trillion and the money supply is $0.5 trillion,then velocity

• A) must be 6.
• B) must be 1/6.
• C) must be 4 trillion.
• D) must be 1/4 trillion.
• E) cannot be determined without knowing what the price level is.

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Definitions:

Fixed Manufacturing Overhead

Indirect manufacturing costs that do not change with the level of production, such as salaries of managers and depreciation of factory equipment.

Estimated Labor-Hours

A projection of the total hours of work required to complete a task or project.

Variable Manufacturing Overhead

The indirect, variable costs associated with manufacturing a product, which change in proportion to production volume.

Fixed Manufacturing Overhead

Refers to the regular, consistent expenses incurred in the operation of a manufacturing facility that do not vary with production volume, including salaries of permanent staff, rent, and insurance.