The Variables in the Index of Leading Indicators Are Included

question 120

Multiple Choice

The variables in the index of leading indicators are included in the index because

• A) they are good indicators of the current rate of inflation.
• B) they generally lag behind turns in the business cycle.
• C) of their tendency to lead (or predict) turns in the business cycle.
• D) they are good indicators of the current state of the economy.

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Definitions:

Activity-based Costing

A costing method that assigns costs to products or services based on the activities they require.

First-stage Allocation

The initial process of assigning overhead costs to different departments or cost centers in a business based on relevant criteria.

Plantwide Overhead Rate

A single overhead absorption rate used throughout a factory or plant for allocating overhead costs to products.

Activity-based Costing

An accounting method that identifies the activities that incur costs and then assigns indirect costs to products based on their use of those activities.