Which of the Following Is a True Statement

question 86

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:

Product Cost

The total expenses incurred to produce a product or service, including direct materials, labor, and manufacturing overhead costs.

Per Unit

Per unit refers to expressing measures, costs, or prices for individual items or quantities of items.

Absorption Costing

This accounting system ensures the inclusion of all manufacturing-related expenses, such as direct materials, direct labor, and both variable and fixed overheads, into the cost of producing a product.

Variable Costing

An accounting technique that incorporates just the variable costs of production (such as direct materials, direct labor, and variable manufacturing overhead) into the costs of products.