The Quantity Theory of Money of the Classical Economists Says

question 45

Multiple Choice

The quantity theory of money of the Classical economists says that a change in the money supply will produce a:

• A) proportional change in the price level.
• B) greater than proportional change in the price level.
• C) less than proportional change in the price level.
• D) wide variation in the velocity of money.

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Definitions:

Variable Overhead

Costs that vary with the level of production output, such as materials, utilities, and commissions, contrary to fixed overheads.

Total Direct Materials Cost Variance

The difference between the budgeted cost of direct materials and the actual cost incurred for the materials.

Direct Materials

Raw materials that are directly used in the manufacturing of a product and can be easily traced to it.

Controllable Variance

The difference between expected and actual costs that managers have the power to influence directly.