Consider an Economy in Which Existing Capital Is Being Used

question 73

Multiple Choice

Consider an economy in which existing capital is being used at a high degree, shortages in labour and goods markets are developing, and costs are rising. Which of the following terms best describes this stage of the business cycle?

• A)peak
• B)trough
• C)recession
• D)recovery
• E)slump

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Definitions:

Operating Expenses

Operating expenses consist of the costs related to a company's primary operational activities, excluding costs associated with manufacturing or production.

Factory Utilities

Expenses related to services like electricity, water, and gas utilized in the manufacturing process.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a specific product and included in its cost.

Manufacturing Overhead

Costs not directly tied to the production of goods, including rent for factory space and equipment depreciation.