-Refer to Table 11

question 22

Multiple Choice

-Refer to Table 11.5. If both G and T decrease by 100, equilibrium output will:

• A) decrease by 200.
• B) decrease by 100.
• C) increase by 100.
• D) stay the same.

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Definitions:

Income Statement

A financial document that provides an overview of a company's performance over a specific period, detailing revenues, expenses, and net earnings.

Net Operating Income

An indicator of a firm's earnings generated from its principal business activities, not accounting for interest and tax deductions.

Variable Costing

An accounting method that includes only variable production costs in product costs, excluding fixed overhead.

Absorption Costing

An accounting strategy that considers every manufacturing expense, including direct materials, direct labor, and overhead costs (both variable and fixed), in determining a product’s cost.