The Tendency for Investment to Increase When Aggregate Output Increases

question 40

Multiple Choice

The tendency for investment to increase when aggregate output increases, and decrease when aggregate output decreases is known as the __________effect.

• A) disequilibrium
• B) accelerator
• C) multiplier
• D) cyclical

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Definitions:

Period Costs

Expenses that are not directly tied to the production of goods and are expensed in the period they are incurred.

CEO Salary Expense

It represents the compensation costs recorded on the income statement for the chief executive officer's salary and related expenses.

Finished Goods

Items that have completed the manufacturing process but have not yet been sold or distributed to end-users.

Materials Ledger

A record keeping system that tracks the quantities and costs of raw materials used and on hand in the manufacturing process.