-In the Above Figure, If the Economy Initially Is at Point

question 153

Multiple Choice

-In the above figure, if the economy initially is at point A and government expenditure increases, in the short run the economy will move to point

• A) C.
• B) B.
• C) A, that is, the equilibrium will NOT change.
• D) None of the above answers is correct.

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Definitions:

Weighted Average Method

A costing method used to determine the average cost of inventory by weighting the cost of goods available for sale by the total units available.

Equivalent Units

A concept used in cost accounting to denote the amount of finished goods units that could have been produced given the total amount of direct materials, labor, and overhead costs incurred.

FIFO Method

An inventory valuation method that assumes the first items purchased are the first ones sold, standing for "first-in, first-out."

Equivalent Units

A concept used in cost accounting to convert partially completed goods into a number of equivalent completed units for inventory valuation.