Purchases of Inventories by

question 49

Multiple Choice

Purchases of inventories by

• A) firms are not counted in investment spending.
• B) firms are also counted in investment spending.
• C) households are also counted in investment spending.
• D) households and Firms are also counted in investment spending.
• E) foreign consumers are counter in investment spending.

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Definitions:

Static Budget

A financial plan that remains unchanged over the budget period regardless of changes in operational activities or volumes.

Flexible Budget

A budget that adjusts or scales according to the volume of activity, providing a more useful tool for performance evaluation.

Direct Labor

Labor costs that are easily traced to or directly associated with specific products or services.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a specific product.