Other Things Equal, the Stock of Capital Inherited by Future

question 191

Multiple Choice

Other things equal, the stock of capital inherited by future generations is likely to be smaller when government spending

• A)increases during a period of recession, rather than prosperity.
• B)is primarily for capital-type goods.
• C)is financed by borrowing.
• D)is financed by taxation.

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Definitions:

Cost Drivers

Factors that cause a change in the cost of an activity, such as machine-hours, labor-hours, or quantity of materials.

Activity Variances

Differences between planned and actual costs arising from changes in activity levels in various cost centers within a business.

Cost Drivers

Factors that cause a change in the cost of an activity, used to assign overhead costs in activity-based costing systems.

Vocational School

An educational institution that provides specialized training and education targeted toward particular careers or trades.