A Manager of a Cost Center Is Evaluated Mainly on

question 49

Multiple Choice

A manager of a cost center is evaluated mainly on

• A) the profit that the center generates.
• B) his or her ability to control costs.
• C) the amount of investment it takes to support the cost center.
• D) the amount of revenue that can be generated.

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Definitions:

Monetary Neutrality

The economic theory that changes in the money supply only affect nominal variables and have no effect on real variables such as output or unemployment in the long run.

Fisher Effect

An economic theory proposing that the real interest rate is independent of monetary measures, specifically that the nominal interest rate adjusts to expected inflation.

Nominal Interest Rate

The rate of interest on a loan or investment without adjusting for inflation.

Money Growth Rate

The rate at which the total amount of money in an economy grows over a specific period, often considered a factor influencing inflation.