A Rise in Autonomous Planned Investment Spending Causes the Equilibrium

question 98

Multiple Choice

A rise in autonomous planned investment spending causes the equilibrium level of aggregate output to ________ and shifts the ________ curve to the ________, everything else held constant.

• A) rise; MP; right
• B) rise; IS; right
• C) fall; IS; left
• D) fall; MP; left

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Definitions:

Manufacturing Overhead

All indirect costs related to the manufacturing process, including but not limited to utilities, rent, and salaries of support staff.

Direct Labor Cost

An alternate term for direct labor, emphasizing the expense associated with the wages and benefits paid to production workers.

Manufacturing Overhead

Indirect factory-related costs that are incurred when a product is manufactured, including costs related to maintenance, utilities, and equipment depreciation.

Total Manufacturing Costs

The sum of all expenses related to the production of goods, including raw materials, labor, and overhead costs.