If the Real Output of a DVC Increases from $200

question 167

Multiple Choice

If the real output of a DVC increases from $200 billion to $240 billion and its population increases from 100 to 110 million, its real per capita output will have

• A)increased by about $182.
• B)increased by about $40.
• C)decreased by about $120.
• D)remained unchanged.

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Definitions:

Variable Budget

A budget that adjusts in response to changes in activity levels or other factors, as opposed to a fixed budget.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate forecasting and analysis.

Static Budget

A fixed budget that remains unchanged over a period, regardless of variations in actual sales volume, production levels, or other operating factors.

Variable Budget

Variable Budget is a budget that adjusts based on changes in the volume of activity, allowing expenses to vary in direct proportion to changes in operational levels.