Changes in Government Spending Are NOT Likely Causes of Business

question 52

Multiple Choice

Changes in government spending are NOT likely causes of business cycles because government spending induced business cycles would, counterfactually predict

• A)procyclical real wages.
• B)countercyclical employment.
• C)countercyclical consumption.
• D)procyclical employment.
• E)countercyclical real wages.

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Definitions:

Overhead Cost

Expenses not directly tied to production but necessary for running the business, such as rent, utilities, and salaries for administrative staff.

Activity-Based Costing

An accounting method that apportions overhead and incidental costs to the respective products and services based on the specific activities involved.

Worker Recreational Facilities

Facilities provided by employers for employees' relaxation and leisure, aiming to improve morale and productivity.

Facility-Level

Pertaining to costs and activities that are necessary for maintaining the overall operation of a plant or company, but not directly tied to individual products.