Aggregate Expenditure Will Not Equal GDP Unless

question 5

Multiple Choice

Aggregate expenditure will not equal GDP unless

• A) next exports are zero.
• B) transfer payments are zero.
• C) inventory investment is positive.
• D) inventory investment is zero.
• E) inventory investment is negative.

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Definitions:

Labour Time Standard

A benchmark or norm established for the amount of time required to perform a specific task or activity under normal working conditions.

Direct Material Price Variance

The difference between the actual cost of direct materials and the expected (or standard) cost.

Direct Labour Rate Variance

The difference between the actual cost of direct labor and the expected (or standard) cost, based on the standard wages paid for that labor.

Direct Labour Efficiency Variance

A measure used in management accounting to assess the difference between the actual hours worked and the standard hours expected to produce a certain level of output.