The Quantity Theory of Inflation Indicates That If the Aggregate

question 101

Multiple Choice

The quantity theory of inflation indicates that if the aggregate output is growing at 3% per year and the growth rate of money is 5%,then inflation is

• A)2%.
• B)8%.
• C)-2%.
• D)1.6%.

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Definitions:

Installment Accounts

Installment accounts are credit accounts where the borrower repays the loan amount plus interest in regular payments over a set period.

Allowance Method

The allowance method is an accounting technique used to account for bad debts by estimating uncollectible accounts and reflecting them as an allowance for doubtful accounts on the balance sheet.

Direct Write-off Method

A method of accounting for bad debts where uncollectible accounts are directly written off against income at the time they are deemed non-collectable.