Which of the Following Is a Policy Option to Eliminate

question 96

Multiple Choice

Which of the following is a policy option to eliminate an AD shortfall?

• A)Decrease government purchases.
• B)Reduce taxes.
• C)Reduce transfer payments.
• D)All of the choices are correct.

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Definitions:

Direct Material Quantity Variance

The difference between the budgeted amount of materials needed for production and the actual amount used, valued at the standard cost.

Cost Standards

Benchmarks or predetermined costs relating to the production of goods or services, serving as a yardstick for measuring actual performance against expected costs.

Direct Material Quantity Variance

The difference between the actual quantity of direct material used and the expected quantity, multiplied by the standard cost per unit.

Actual Production

The real quantity of goods or services produced during a specific period, as opposed to planned or theoretical outputs.