Programs That Automatically Increase Government Spending (Relative to Revenue) During

question 54

Multiple Choice

Programs that automatically increase government spending (relative to revenue) during a recession and automatically decrease government spending (relative to revenue) during an economic boom are called:

• A) discretionary fiscal policy.
• B) supply-side programs.
• C) automatic stabilizers.
• D) tax credits.

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Definitions:

Fixed Factory Overhead Volume Variance

The difference between the budgeted and actual fixed overhead costs, attributable to changes in production volume.

Standard Factory Overhead Rate

A predetermined rate used to assign manufacturing overhead costs to individual units of output on a consistent basis.

Normal Capacity

The average operating capacity a company can sustain under normal circumstances, taking into account seasonal and cyclical demand fluctuations.

Direct Labor Hour

The amount of time spent by employees directly working on producing goods or services.