Prolonged Periods of Monetary Contraction, as Was the Case During

question 87

Multiple Choice

Prolonged periods of monetary contraction, as was the case during the Great Depression, will likely result in

• A) an increase in real output and employment.
• B) an increase in loanable funds and upward pressure on the rate of inflation.
• C) a decrease in output and downward pressure on prices.
• D) a decrease in unemployment and upward pressure on prices.

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Definitions:

Work In Process

An inventory category that refers to partially completed goods that are still in production.

FIFO Method

"First In, First Out" method, an inventory costing technique that assumes the first items added to inventory are the first ones sold.

Beginning Inventory

The value of all the inventory held by a business at the start of an accounting period.

Equivalent Units

A concept in cost accounting used to express the amount of work done on incomplete units in terms of fully completed units.