If Inflation Is 3 Percent Last Year and 2 Percent

question 86

Multiple Choice

If inflation is 3 percent last year and 2 percent this year an individual who follows extrapolative expectations, what is the inflation rate that the individual is likely to for the coming year?

• A)0 percent
• B)1 percent
• C)3 percent.
• D)5 percent.

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Definitions:

Direct Labor Cost

The total cost of employing workers who are directly involved in the manufacture of goods or the provision of services.

Direct Materials

Primary materials directly linked to the production of a good and are categorized as variable expenses.

Cost of Goods Manufactured

The total cost of manufacturing the goods that were completed during a specific accounting period, including labor, materials, and overhead.

Indirect Labor

Labor costs associated with employees who do not directly work on the production of goods or services but support the production process.