If the Multiplier Is 6 and Exports Decrease by $30

question 236

Multiple Choice

If the multiplier is 6 and exports decrease by $30, what impact will that have on aggregate expenditure?

• A) increase by $180
• B) increase by $30
• C) decrease by $30
• D) decrease by $180

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Definitions:

Unavoidable Allocated Fixed Corporate Costs

These are fixed costs that are essential and non-avoidable, allocated across different departments or projects within a corporation.

Contribution Margin

The amount by which the sale of a product exceeds its variable costs, indicating how much contributes to covering fixed costs and generating profit.

Manufacturing Overhead

All the indirect costs associated with producing goods, such as utilities, maintenance, and factory management salaries, not directly attributable to a specific product.

Standard Cost

A predetermined cost of manufacturing, selling, or doing anything, which serves as a benchmark against actual costs.