The Table Below Shows Data for Indonesia Between 2005 and 2006

question 326

Multiple Choice

The table below shows data for Indonesia between 2005 and 2006. $$\begin{array} { | l | c | c | } \hline & \mathbf { 2 0 0 5 } & \mathbf { 2 0 0 6 } \\\hline \text { Money growth rate } & 21.4 & 12.0 \\\hline \text { Real GDP growth rate } & 5.7 & 5.5 \\\hline\end{array}$$
Assume the rate of velocity change is constant. 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:

Financial Reporting

The method by which declarations are created to reveal the financial condition of an organization to its managers, investors, and governmental bodies.

External Auditor

An independent third-party professional who examines the financial statements of a company to provide an opinion on their accuracy and compliance with accounting standards.

Cost-Plus Contracts

Agreements where a contractor is paid for all construction-related expenses plus a contracted profit.

Profit Markup

The amount added to the cost price of goods to cover overhead and profit; a measure of the profit margin.