Suppose That the Inflation Rate for a Given Year Was

question 164

Multiple Choice

Suppose that the inflation rate for a given year was 3%.In that year,

• A) all prices rose by 3%
• B) prices on average rose by 3%
• C) the economy was in an expansion
• D) the economy was in a recession
• E) the inflation rate was rising

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Definitions:

Variable Overhead Rate

Variable overhead rate is the cost per unit of indirect or overhead activities that vary with production volume, such as electricity for machinery.

Overhead Efficiency

The measurement of how effectively a business or project manages its overhead costs.

Fixed Overhead Budget

A plan that outlines anticipated fixed costs that do not vary with the level of production or sales.

Fixed Overhead Volume

The quantity of fixed overhead costs that do not change with the level of production or activity.