Which of the Following Quotations Illustrates the Idea of the Multiplier

question 127

Multiple Choice

Which of the following quotations illustrates the idea of the multiplier?

• A)"The new stadium will generate $200 million in spinoff spending."
• B)"Taking the grain elevator out of our small town will destroy 300 jobs."
• C)"Higher expected profits are leading to higher investment spending by business, and will lead to higher consumer spending."
• D)"The projected cuts in government jobs will hurt the local retail industry."
• E)All of the above

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Definitions:

Budgeted Sales

Sales levels projected or planned for a future period.

Manufacturing Overhead Budget

A detailed plan that estimates all expected indirect production costs except for direct labor and direct materials.

Fixed Manufacturing Overhead

The set of manufacturing costs that do not vary with the level of production, such as salaries of factory supervisors and rent of the manufacturing facility.

Manufacturing Overhead Budget

A plan that outlines the expected manufacturing overhead costs for a period, helping businesses control and allocate expenses effectively.