If You Get an 8 Per Cent Increase in Your

question 58

Multiple Choice

If you get an 8 per cent increase in your nominal income, your real income

• A) definitely increases.
• B) increases if the inflation rate is more than or equal to 8 per cent.
• C) increases only if the inflation rate is more than 8 per cent.
• D) increases only if the inflation rate is less than 8 per cent.
• E) increases only if the inflation rate is equal to 8 per cent.

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Definitions:

Controllable Cost

Costs that can be influenced or managed by a decision-maker within a certain period.

Managerial Responsibility

The obligation of managers to make decisions, supervise subordinates, and implement activities that contribute to achieving the organization's objectives.

Variable Cost

Costs that vary directly with the level of production or output, such as materials and labor used in the production process.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, providing a more useful comparison for actual versus budgeted performance.