If the Economy Falls into a Recession, Which of the Following

question 6

Multiple Choice

If the economy falls into a recession, which of the following responses constitutes the use of an automatic stabilizer?

• A) an income tax cut voted on by Congress and quickly signed by the President
• B) a new program to fund local governments' hiring of 100,000 street sweepers within a year
• C) an existing system to direct government payments to the growing ranks of unemployed workers
• D) All of the above answers are correct.

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Definitions:

Job Order Costing

An accounting method that accumulates costs for individual jobs or orders, commonly used in manufacturing goods or providing services that are distinct or custom.

Work in Process

Work in process (WIP) refers to the materials and goods that are in the production process but not yet completed, representing a part of inventory on a company's balance sheet.

Predetermined Overhead Rate

A predetermined rate, established prior to the start of the accounting period, that is applied to assign manufacturing overhead expenses to specific production units.

Direct Materials Cost

The cost of raw materials and components that are directly used in the production of a product.