If the Currency in Circulation Is $100 Million, Checkable Bank

question 173

Multiple Choice

If the currency in circulation is $100 million, checkable bank deposits are $500, savings deposits are $300 million, and traveler's checks are $10 million, then M1 is:

• A)$100 million.
• B)$410 million.
• C)$610 million.
• D)$900 million.

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Definitions:

Allocation Base

A measure or statistics used to determine how to distribute indirect costs to various cost objects in a way that is equitable and rational.

Overhead Costs

Indirect expenses related to the general operation of a business, such as administrative salaries, rent, and utilities, that cannot be directly attributed to a specific product or service.

Plantwide Overhead Rate

A single overhead rate calculated for an entire manufacturing plant, used to allocate overhead costs to multiple production departments or products.

Machine Hours

A measurement representing the operational running time of machinery, used in allocating manufacturing overhead costs based on usage.