An Inflation Hawk Is Someone Who

question 24

Multiple Choice

An inflation hawk is someone who:

• A)puts equal weight on maintaining output at potential and keeping prices stable.
• B)is committed to maintaining low inflation even at the cost of reduced output and employment.
• C)is committed to maintaining output at potential even at the cost of high inflation.
• D)encourages policy accommodation.

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Definitions:

Common Fixed Expenses

Expenses that remain constant in total regardless of changes in the level of activity or volume of output within a certain range.

Variable Costing

An accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs and treats fixed manufacturing overhead as a period expense.

Contribution Format

A method of profit reporting that separates fixed and variable costs, highlighting the contribution margin of products, services, or business segments.

Variable Costing

A technique in managerial accounting where only variable production costs are charged to product units, differentiating it from absorption costing by not including fixed overhead.