Assume That the Growth Rate of Real GDP in Astoria

question 51

Multiple Choice

Assume that the growth rate of real GDP in Astoria is 7.5%.Assume the growth rate of velocity is 0%.If Astoria's current annual inflation rate is 5.99%,the growth rate of the money supply will be

• A) -1.51%.
• B) 1.51%.
• C) 5.99%.
• D) 13.49%.

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Definitions:

Variable Costs

Costs that change in proportion to the level of activity or volume of production in a business, such as materials and labor.

Activity Variance

The difference between a revenue or cost item in the flexible budget and the same item in the static planning budget. An activity variance is due solely to the difference between the actual level of activity used in the flexible budget and the level of activity assumed in the planning budget.

Flexible Budget

A report showing estimates of what revenues and costs should have been, given the actual level of activity for the period.

Static Planning Budget

is a budget based on a fixed level of activity and does not change with actual activity levels, useful for planning but less so for performance evaluation.