Nayla Is Preparing a Budget for a Business Proposal, and She

question 47

Multiple Choice

Nayla is preparing a budget for a business proposal, and she needs to include $5,000 in materials costs as part of a total budget of $25,000. Which of the following guidelines will help Nayla obtain the required budget?

• A) Give only the $25,000 total cost of the project.
• B) Provide a precise breakdown of materials and their costs adding up to $5,000.
• C) Mention only the $5,000 total for materials.
• D) Provide an optimistic estimate of materials costs around $2,500.
• E) Include the $5,000 materials cost as well as a $3,000 "pad" in case of cuts.

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Definitions:

Rational Expectations

An economic theory suggesting that individuals make predictions about future events using all available information, thus their expectations are on average correct.

Rational Expectations

The hypothesis in economics that assumes individuals form forecasts of future events based on all available information in an unbiased and rational manner.

Potential Output

The highest level of output an economy can produce without leading to inflation, when operating at full employment.

Monetary Policy

Actions undertaken by a central bank to control the money supply and interest rates to achieve macroeconomic objectives like controlling inflation, consumption, growth, and liquidity.