The Crowding Out of Net Exports Resulting from Expansionary Fiscal

question 64

Multiple Choice

The crowding out of net exports resulting from expansionary fiscal policy in the long run is due in part to

• A) the tendency of some government spending to go toward imports.
• B) the negative relationship between government purchases and interest rates in a full-employment economy.
• C) the inflow of foreign capital that results from high interest rates.
• D) the outflow of domestic capital that results from low interest rates.
• E) none of the above.

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Definitions:

Overhead Rate

A calculated rate used to allocate overhead costs to products or services, usually determined by dividing total overhead costs by an allocation base.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders, calculated based on the estimated costs and activity levels before the period begins.

Job-Order Costing

An accounting system used to assign costs to specific jobs or batches, ideal for manufacturing or service environments where each job is distinct.

Machine-Hours

The number of hours that machines are operated in the production process during a specific period.