If the Short-Run Equilibrium Output of the United States Exceeds

question 144

Multiple Choice

If the short-run equilibrium output of the United States exceeds the potential output,the Fed:

• A)employs an active monetary policy to close a recessionary gap.
• B)employs an active monetary policy to close an expansionary gap.
• C)relies on a passive approach to close a recessionary gap.
• D)relies on a passive approach to close an expansionary gap.
• E)employs an expansionary fiscal policy.

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Definitions:

Activity Cost Pools

Aggregations of all the costs associated with specific activities used in activity-based costing.

Departmental Overhead Rates

Rates calculated to allocate overhead costs to specific departments based on their activities or output.

Machine Hours

A measure of production time used in manufacturing, indicating the total hours a machine is operated.

Oak Paneling

Oak paneling refers to wall or ceiling covering material made from oak wood, prized for its durability, appearance, and texture.