If Nominal GDP Is $12 Trillion, the Price Level Is

question 192

Multiple Choice

If nominal GDP is $12 trillion, the price level is 120, and the quantity of money is $4 trillion, what is the velocity of circulation?

• A) 3
• B) 2.5
• C) 30
• D) 25

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Definitions:

Overapplied Manufacturing Overhead

A scenario where the allocated manufacturing overhead costs exceed the actual overhead costs incurred, resulting in a credit balance.

Predetermined Overhead Rate

This is a rate used to allocate manufacturing overhead costs to individual units of production, based on a certain activity, such as labor hours or machine hours.

Direct Materials

Substances that can be directly linked to the manufacturing of a particular item.

Direct Labor

Labor costs that can be easily traced to individual units of product; essentially the wages paid to workers who directly manufacture goods.