Refer to the Tables of Information for a Private Closed

question 55

Multiple Choice

$$\begin{array}{l}\begin{array} { | c | c | } \hline \text { Gross Domestic Product } & \text { Consumption } \\\hline \$ 100 & \$ 120 \\\hline 200 & 180 \\\hline 300 & 240 \\\hline 400 & 300 \\\hline 500 & 360 \\\hline\end{array}\\\\\begin{array} { | c | c | } \hline \text { Expected Rate of Return } & \text { Amount of Investment } \\\hline 25 \% & \$ 0 \\\hline 20 & 20 \\\hline 15 & 40 \\\hline 10 & 60 \\\hline 5 & 80 \\\hline\end{array}\end{array}$$ Refer to the tables of information for a private closed economy. The multiplier for this economy is

• A) 2.
• B) 2.5.
• C) 3.
• D) 4.

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Definitions:

Raw Materials Inventory

The total cost of all components or materials a company has in stock that are intended for use in production to create finished goods.

Quarter's Production Needs

The estimated quantity of products that a company plans to produce in a specific quarter to meet customer demand.

Variable Overhead Rate

The rate at which variable overhead costs are applied to a product based on a specific activity or driver.

Direct Labor-Hours

The total hours worked directly on manufacturing a product or providing a service.