Which of the Following Will Increase Aggregate Demand in the United

question 4

Multiple Choice

Which of the following will increase aggregate demand in the United States?

• A) a higher price level
• B) an increase in the real interest rate
• C) an increase in wealth due to a substantial appreciation in the value of stocks
• D) a decrease in real income in Japan and Western Europe

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Definitions:

Standard Costs

The practice of assigning an expected cost to products, with the aim of assessing performance by comparing these costs to actual costs.

Direct Labor Time Variance

The cost associated with the difference between the actual hours and the standard hours of direct labor spent producing a commodity multiplied by the standard direct labor rate per hour.

Actual Costs

The real costs incurred in the production of goods or providing services, as opposed to estimated or standard costs.

Standard Costs

Standard costs are predetermined costs to manufacture a single unit or a number of units of a product during a specific period under current or anticipated conditions.