Which of the Following Is FALSE Regarding the Dynamic Stochastic

question 34

Multiple Choice

Which of the following is FALSE regarding the dynamic stochastic general equilibrium models?

• A)in each quarter, shocks will occur that will affect the individual equations used in the model to describe the economy
• B)decisions made by economic agents are assumed to depend on the agents' expectation about the future
• C)most equations in the models are based on linear specifications
• D)the models assume intertemporal optimization on everyone's part
• E)some central banks use these models to better understand how the economy responds to policy changes

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Definitions:

Factory Overhead Rate

A calculation used to allocate indirect manufacturing costs to products, typically based on a base measure like labor hours or machine hours.

Direct Labor Cost

The total cost of employment for workers directly involved in the manufacturing of products or delivery of services.

Time Tickets

documents used to record the amount of time an employee spends on various tasks, useful for job costing and payroll.

Factory Overhead

All costs related to production that are not direct materials or direct labor costs.