The Table Below Shows Data for Indonesia Between 2005 and 2006

question 404

Multiple Choice

The table below shows data for Indonesia between 2005 and 2006. Assume the velocity of circulation did not change. According to the quantity theory of money, Indonesia's inflation rate

• A) is higher in 2005 than in 2006.
• B) was 17.5 percent in 2006.
• C) is 27.1 percent in 2005.
• D) will increase over the 12 months.

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Definitions:

Double Declining-Balance

An accelerated depreciation method that doubles the normal depreciation rate, reducing the book value of assets more quickly in the initial years.

Normal Balance

The expected debit or credit balance of an account, indicating its typical financial activity and position in the accounting equation; a different phrasing from the first definition.

Permanent/Temporary

Permanent/temporary classification refers to the duration for which assets, liabilities, or policies are intended to last, with permanent being indefinite and temporary for a limited period.

Normal Balance

The expected debit or credit balance a particular account should hold under double-entry bookkeeping.