When Aggregate Demand Is High Enough to Drive Unemployment Below

question 119

Multiple Choice

When aggregate demand is high enough to drive unemployment below the natural rate,

• A) there is downward pressure on the price level,and the government may want to conduct contractionary fiscal policy.
• B) the economy is slipping into a recession,and the government may want to conduct expansionary fiscal policy.
• C) there is upward pressure on the price level,and the government may want to conduct contractionary fiscal policy.
• D) there is upward pressure on the price level,and the government may want to conduct expansionary fiscal policy.
• E) there is downward pressure on the price level,and the government may want to conduct expansionary fiscal policy.

Differentiate between flexible and fixed budgets and their related variances.

Understand and calculate direct labor and direct materials variances including rate, efficiency, and price.

Understand the key categories of production costs.

Comprehend the concepts of fixed and variable costs within flexible budgets.

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