A Decrease in the Marginal Propensity to Save Is Likely

question 114

Multiple Choice

A decrease in the marginal propensity to save is likely to

• A)Increase physical capital investment.
• B)Decrease physical capital investment.
• C)Have no effect on physical capital investment.
• D)Increase or decrease physical capital investment,depending on magnitude.

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Definitions:

Overapplied Overhead

A credit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost applied to Work in Process is greater than the amount of overhead cost actually incurred during a period.

Underapplied Overhead

A debit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost applied to Work in Process is less than the amount of overhead cost actually incurred during a period.

T-account

A visual representation of a ledger account that outlines the effects of transactions on an account, with debits on the left and credits on the right.

Overhead Cost Applied

The process of assigning estimated indirect costs to specific manufacturing jobs based on the predetermined overhead rate.