Which of the Following Would Cause an Increase in M1

question 33

Multiple Choice

Which of the following would cause an increase in M1?

• A)a reduction in the required ratio of reserves to deposits
• B)an increase in the discount rate
• C)an open market operation where the Fed buys bonds
• D)all of the above
• E) none of the above

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Definitions:

Conversion Costs

The costs required to convert raw materials into finished goods, including direct labor and manufacturing overhead.

Equivalent Unit

A concept used in cost accounting to convert the amount of work done on partially finished goods into the equivalent of complete goods.

First-in

Typically refers to the "First-in, First-out" (FIFO) inventory method, where goods that are first produced or acquired are the first ones to be sold.

Conversion Costs

The sum of labor costs and manufacturing overhead costs, representing the expenses necessary to convert raw materials into finished goods.