An Increase in Taxes Is Likely To

question 176

Multiple Choice

An increase in taxes is likely to:

• A) result in an increase in aggregate supply.
• B) increase the real interest rate.
• C) increase the demand for money.
• D) crowd in investment spending by businesses.

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Definitions:

Factory Labor Costs

Expenses associated with employing labor in a manufacturing setting, including wages, salaries, and benefits.

Manufacturing Overhead

All manufacturing costs other than direct labor and direct materials that are involved in the creation of a product.

Work in Process Inventory

Goods that are in various stages of the production process but are not yet completed products.

Raw Materials Inventory

The stock of basic materials and components required to manufacture products.