The Ricardo- Barro Effect Asserts That Government

question 99

Multiple Choice

The Ricardo- Barro effect asserts that government

• A)expenditure affects private expenditure.
• B)budget deficits crowd- out private borrowing.
• C)saving affects private saving.
• D)taxation raises interest rates.

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Definitions:

Variances

The difference between planned or expected financial outcomes and the actual results.

Direct Materials

Raw materials that directly become a part of the finished product and can be easily traced to it.

Standard Cost

A predetermined cost of manufacturing a single unit or a number of product units during a specific period under current or anticipated operating conditions.

Direct Labor Variances

The differences between the actual costs of direct labor and the standard or expected costs, used for budgeting and cost control.