In the Quantity Theory of Money,the Assumption That Aggregate Output

question 11

Multiple Choice

In the quantity theory of money,the assumption that aggregate output is fixed is based on the view that ________.

• A)wages and prices are perfectly flexible in the long run
• B)the velocity of money is constant in the short run
• C)the demand for real money balances is proportional to income
• D)changes in the quantity of money lead to proportional changes in the price level
• E)none of the above

---

Definitions:

Administrative Expenses

Costs related to the general operation of a company, including expenses such as salaries of non-sales personnel, and office supplies.

Planning Budget

A planning budget is projected financial plan that outlines an organization's expected revenues, expenses, and capital needs for a future period.

Net Operating Income

The profit derived from a company's everyday business operations after subtracting all operating expenses from gross income.

Flexible Budget

A budget that adjusts or flexes with changes in volumes or activity levels, allowing for better cost control and planning.