The Equation of Exchange Specifies That

question 197

Multiple Choice

The equation of exchange specifies that

• A) MsV = PY.
• B) velocity and money supply are directly related.
• C) MsP = VY.
• D) Ms = PVY.

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Definitions:

Direct Materials

The raw materials that can be directly traced to the manufacturing process of a product.

Indirect

Costs or actions that are not directly traceable to a specific product, service, or activity but are necessary for the business to operate.

Direct

Expenses or costs that can be directly traced to a specific cost object, like a product, department, or project.

Cost Object

Anything for which cost data are desired. Examples of cost objects are products, customers, geographic regions, and parts of the organization such as departments or divisions.