Developing Countries Employ the Inflation Tax Because It Provides A

question 118

Multiple Choice

Developing countries employ the inflation tax because it provides a:

• A)long-run solution to their budget problems even if it is politically unpopular.
• B)short-run solution that helps keep the government afloat, even if only temporarily.
• C)a solution to their inflation problem.
• D)long-run solution to both their economic and political problems.

---

Definitions:

Direct Material Price Variance

The difference between the actual cost of direct materials used and the expected (or standard) cost, which can indicate efficiency in purchasing materials.

Standard Costing

A cost accounting method that uses standard costs for direct materials, labor, and overhead to help managers control costs by comparing expected costs to actual costs.

Isolating Variances

A process in managerial accounting for identifying and analyzing differences between actual and expected performance.

Direct Materials

Raw materials directly traceable and assignable to a manufactured product as it is being produced.