(Figure: Expectations 0) in the Figure, What Is the Cause

question 19

Multiple Choice

(Figure: Expectations 0) In the figure, what is the cause of the movement from point a to b?

• A) positive demand shock
• B) negative demand shock
• C) self-correcting mechanism
• D) inflation expectations

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Definitions:

Labor Rate Variance

The difference between the actual cost of labor and the expected (or standard) cost, based on the hours worked.

Labor Rate Variance

A specific type of variance that measures the difference between the actual hourly wage paid to workers and the standard rate expected.

January

The first month of the year in the Gregorian calendar.

Variable Overhead Rate Variance

The difference between the actual variable overhead costs incurred and the standard variable overhead expenses expected for the actual level of production activity.