Everything Else Held Constant,if the Federal Government Were to Guarantee

question 46

Multiple Choice

Everything else held constant,if the federal government were to guarantee today that it will pay creditors if a corporation goes bankrupt in the future,the interest rate on corporate bonds will ________ and the interest rate on Treasury securities will ________.

• A)increase;increase
• B)increase;decrease
• C)decrease;increase
• D)decrease;decrease

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Definitions:

DLH

The hours of work performed by workers directly involved in the manufacturing process, serving as a basis for allocating labor costs.

Volume Variance

The difference between the expected volume of production or sales and the actual volume, affecting costs or revenues.

Variable Overhead Efficiency Variance

A calculation used to measure the efficiency with which a firm uses its variable overhead resources, based on the difference between actual and expected usage.

Unfavorable

A term describing outcomes that are worse than expected or budgeted, often used in financial and operational analysis.