According to the Monetarists

question 43

Multiple Choice

According to the monetarists

• A) an increase in the money supply will not affect the price level in the long run.
• B) output can never be above its full employment level.
• C) a decrease in the money supply will have no effect on output in the short run.
• D) the economy will move to its full employment output level in the long run.

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Definitions:

Factory Overheads

Factory overheads consist of all the indirect costs involved in manufacturing, including but not limited to utilities, rent, and salaries not directly tied to production activities.

Variable Cost

Expenses that change in proportion to the level of production or sales volume.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual increments.

Assembly Line

A production process that breaks down a complex job into a series of smaller tasks, which are completed in a sequential manner.