A Shift in the Consumption Function

question 132

Multiple Choice

A shift in the consumption function:

• A)is based on the marginal propensity to consume.
• B)can be caused by a change in the price level.
• C)can be caused by a change in GDP.
• D)None of these.

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Definitions:

Period Cost

Expenses that are not directly tied to the production of goods and are instead associated with time periods, such as administrative salaries.

Variable Costing

A method of cost accounting where only variable production costs are included in product costs, with fixed overhead expenses treated as period costs.

Unit Product Cost

The total cost associated with producing a single unit of a product, calculated by dividing the total production costs by the number of units produced.

Variable Costing

A technique in management accounting that only considers variable production costs as product costs, with fixed costs treated as period costs.