All Else Being Equal, If Consumption Rises as a Share

question 88

Multiple Choice

All else being equal, if consumption rises as a share of GDP, then

• A)future consumption will fall.
• B)people must be saving more.
• C)there must have been an increase in GDP.
• D)people must have experienced an increase in wealth.
• E)there will be less available to consume in the future.

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Definitions:

Manufacturing Overhead

All indirect costs associated with manufacturing, such as utilities, maintenance, and factory management salaries, not directly tied to producing a specific product.

Opportunity Costs

The cost of foregoing the next best alternative when making a decision or choosing an option.

Activity Increases

A term indicating a rise in the level of business or production activities.

Contribution Margin

The amount by which sales revenue exceeds variable costs, contributing towards covering fixed costs and profit.