If Real GDP Is Greater Than Potential GDP

question 123

Multiple Choice

If real GDP is greater than potential GDP,

• A)the rate of inflation will not change.
• B)the price level will not change.
• C)the rate of inflation will decrease.
• D)the price level will fall.
• E)the rate of inflation will increase.

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Definitions:

Process Costing

A costing method used where similar goods or services are produced in mass quantities, and the cost of producing each unit is assumed to be the same.

Job Order Costing

A cost accounting system that assigns manufacturing costs to each individual product or batch, making it suitable for customized orders or distinct products.

Cost Object

Any item for which a separate measurement of costs is desired; can include products, services, projects, or activities.

Indirect Materials

Materials used in the production process that are not directly traceable to individual products, such as lubricants and cleaning supplies.