Which of the Following Is a True Statement

question 75

Multiple Choice

Which of the following is a true statement?

• A)Firms and resource suppliers generally find it easier to reduce prices than to raise them.
• B)As the price level increases, interest rates will rise and therefore consumption and investment spending will also rise.
• C)An initial increase in aggregate demand may cause a further increase in aggregate demand because higher prices mean higher incomes.
• D)A decline in aggregate demand will primarily affect real output and employment if prices are inflexible downward.

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Definitions:

Overhead Applied

The portion of manufacturing overhead costs allocated to individual products or job orders based on a predetermined overhead rate.

Products

Goods or commodities that are manufactured or refined for sale.

Variable Overhead Efficiency Variance

The difference between actual hours taken to produce something and the standard hours expected, multiplied by the variable overhead rate.

Budget Variance

The difference between the budgeted or planned amount of expense or revenue, and the actual amount incurred or received.