If the Traditional Keynesian Views Turn Out to Be Accurate

question 34

Multiple Choice

If the traditional Keynesian views turn out to be accurate, an increase in government spending would:

• A)increase the price level.
• B)decrease the investment.
• C)increase the equilibrium level of real GDP.
• D)decrease the consumption.
• E)decrease the money supply.

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Definitions:

Direct Materials

Raw materials that are directly used in the production of a product and can be easily traced to the finished product.

Conversion Costs

Sum of labor costs and overhead expenses associated with the transformation of raw materials into finished goods.

First-In

Typically part of the phrase "First-In, First-Out" (FIFO), a method used to assign costs to inventory on the basis that the first items entered into inventory are the first sold.

Equivalent Units

A term used in cost accounting to denote a conversion measure that expresses the amount of work done on partially completed units in terms of fully completed units.