If the Bank Agrees to Make a Loan at a 7

question 59

Multiple Choice

If the bank agrees to make a loan at a 7% interest rate and the inflation rate is 3%, then 4% is the ______ rate.

• A)nominal interest
• B)real interest
• C)hyperinflation
• D)disinflation

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Definitions:

Direct Labor Variance

The difference between the actual labor costs incurred and the standard labor costs expected for the actual production level, reflecting efficiency and cost control in production.

Per-unit Standards

Predetermined costs to produce a single unit of product, used in budgeting and cost control.

Direct Labor Hours

The total hours worked by employees directly involved in manufacturing products or providing services.

Direct Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity expected, multiplied by the standard cost per unit.