Suppose, for a Certain Economy, Real and Potential GDP Are

question 94

Multiple Choice

Suppose, for a certain economy, real and potential GDP are initially equal. Then government purchases permanently increase. Compared to the baseline, we would expect to see, in the medium run,

• A)a decrease in consumption and an increase in both net exports and investment.
• B)a decrease in consumption, investment, and net exports.
• C)an increase in consumption, a decrease in net exports, and no change in investment.
• D)an increase in consumption and net exports and a decrease in investment.
• E)an increase in consumption and a decrease in both net exports and investment.

Understand the interrelation and dependency among various competencies for successful implementation.

Recognize the role and importance of written and verbal communication.

Grasp the increasing need for constant learning, adaptation, and innovation due to technological advancements.

Acknowledge the ethical principles and values in decision making.

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Definitions:

Manufacturing Overhead Cost Driver

A factor that causes the cost of manufacturing overhead to change, such as machine hours or labor hours.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead costs to products, calculated before the period begins based on estimated costs and activity levels.

Variable Manufacturing Overhead

Costs in the manufacturing process that vary with the level of production output, such as materials and energy usage.

Fixed Manufacturing Overhead

Costs associated with manufacturing that remain constant regardless of the level of production, such as salaries of management and rent of the facility.