Figure 36 -9 Figure 36-9 Shows Aggregate Expenditures When Net Exports Are Fixed

question 188

Multiple Choice

Figure 36 -9

Figure 36-9 shows aggregate expenditures when net exports are fixed and aggregate expenditures are variable. The autonomous spending multiplier is

• A) smaller when net exports are fixed.
• B) smaller when net exports are variable.
• C) larger when net exports are variable.
• D) the same whether net exports are fixed or variable.

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Definitions:

Step-Down Method

A cost allocation method used in accounting to allocate indirect costs to different departments or products sequentially.

Allocate Total Support

The process of assigning the full amount of indirect costs or overheads to specific activities, departments, or products.

Department Costs

Refers to the total expenses incurred by a specific department within a business, covering materials, labor, and overhead.

Support Department

A division within an organization that provides assistance and advice services to those who buy or use its products or services.