Table 13-3 All Figures in Billions of Base-Year Dollars

question 45

Multiple Choice

Table 13-3
All figures in billions of base-year dollars

-Refer to Table 13-3. Holding everything else constant, if government purchases increase by $100 billion, equilibrium real GDP will increase by

• A) $100 billion.
• B) $200 billion.
• C) $250 billion.
• D) $300 billion.

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Definitions:

Predetermined Overhead Rate

A rate used to allocate indirect costs to products or services, calculated before the accounting period begins based on estimated costs and activity levels.

Direct Labor-hour

A metric that calculates the total number of hours worked by employees directly involved in manufacturing a product or providing a service.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead to individual units of production, based on a related activity base.

Machine-hours

A measure of the amount of time machines are used in the production process, often used as an allocation base for applying manufacturing overhead.