Inflation Occurs When Output Increases Faster Than the Money Supply

question 70

True/False

Inflation occurs when output increases faster than the money supply.

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Definitions:

Direct Material

Raw materials that are directly traced and assigned to the production of a specific product.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected quantity, multiplied by the standard cost per unit of material.

Kilos

A metric unit of mass equal to one thousand grams, commonly used for measuring weight in many countries.

Materials Price Variance

The difference between the actual cost of materials and the standard cost, multiplied by the quantity purchased.