In the Short Run, an Increase in the Cash Rate

question 58

Multiple Choice

In the short run, an increase in the cash rate _ the real interest rate and investment.

• A)raises; increases
• B)lowers; decreases
• C)raises; decreases
• D)lowers; increases

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Definitions:

Machine-Hours

A unit of measure representing the cumulative number of hours a machine is operated within a specific time frame.

Activity Rate

A measure used to assign costs to cost objects, based on the activities that drive costs in an activity-based costing system.

Activity-Based Costing

A cost allocation method that spots activities inside an organization and apportions the costs of these activities to all products and services, according to how much they actually use.

Manufacturing Overhead

All manufacturing costs that are not directly related to individual products, including costs related to indirect labor, materials, and factory operations.