Figure 11-5 -Refer to Figure 11-5. If the Economy Is at Point

question 25

Multiple Choice

Figure 11-5
-Refer to Figure 11-5. If the economy is at point c,

• A) it is in a recessionary gap.
• B) it is at natural level of employment.
• C) the level of employment is greater than the natural level of employment.
• D) the unemployment rate is negative.

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Definitions:

LIFO

An inventory valuation method that assumes the items most recently put into inventory are the first ones sold.

Ending Inventory

The overall worth of items ready for sale after an accounting period, determined by starting inventory added to purchases and then subtracting the cost of goods sold.

Periodic Inventory System

An inventory accounting system where updates to the quantity and cost of inventory are made at specified intervals, such as monthly or yearly, not continuously.

FIFO Method

FIFO method, or First-In, First-Out, is an inventory costing method where the first items placed into inventory are the first ones sold, used for calculating cost of goods sold and ending inventory.