If Output Gap in an Economy Declines Because of a Gradual

question 47

True/False

If output gap in an economy declines because of a gradual increase in aggregate demand as the economy moves out of a recession, it is called a real business cycle effect.

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected (or standard) variable overhead based on activity levels.

Favorable

A term used in accounting and finance to describe outcomes or variances that are better than anticipated, indicating a positive performance against the budget or forecast.

Unfavorable

A term used to describe a variance or outcome that results in a worse financial position than expected or budgeted.

Labor Rate Variance

The difference between the actual labor costs incurred and the expected (or standard) labor costs, often due to paying a higher or lower wage rate than planned.