The Quantity Theory of Money Suggests That Changes in the Money

question 115

Multiple Choice

The quantity theory of money suggests that changes in the money supply have direct effects on

• A) real GDP.
• B) consumption.
• C) investment.
• D) inflation.
• E) the velocity of money.

---

Definitions:

Direct Materials Purchase Budget

A financial plan that estimates the cost and quantity of raw materials required for production in a specific period.

Ending Inventories

The value of goods available for sale or use at the end of an accounting period.

Direct Labor Budget

A financial plan that forecasts the costs associated with the labor directly involved in the production of goods or services.

Direct Labor-Hour

A metric indicating the total hours worked by employees directly involved in the production process, often used for costing purposes.