According to the Simple Quantity Theory of Money in the AD-AS

question 108

Multiple Choice

According to the simple quantity theory of money in the AD-AS framework,when the money supply increases,the result is __________ in Real GDP and __________ in the price level.

• A) no change; no change
• B) a rise; no change
• C) no change; a rise
• D) a rise; a fall
• E) a fall; a rise

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Definitions:

Variable Costing

An accounting method that only allocates variable costs to products, excluding fixed overhead costs.

Net Operating Income

The profit generated from a company's core business operations, excluding expenses and revenues that are unrelated to the primary activities of the business.

Absorption Costing

A method of accounting for costs in which all costs of manufacturing a product (including variable and fixed overhead costs) are considered product costs.

Net Operating Income

The profit generated from a company's normal business operations, excluding expenses such as taxes and interest charges.