If Wealthy U

question 59

Multiple Choice

If wealthy U.S.consumers save most of their tax cut, this means that, compared to government spending changes,

• A)tax changes would have a higher multiplier effect.
• B)tax changes would have a weaker multiplier effect.
• C)government spending would have a weaker multiplier effect.
• D)U.S.consumers would spend all of their tax cut.

Differentiate between fixed, variable, and mixed costs and calculate each based on given data.

Identify and classify costs as direct or indirect in different contexts, including manufacturing and departmental accounting.

Compute total variable, fixed, and mixed costs at different levels of activity.

Apply cost-volume-profit analysis for decision-making.

---

Definitions:

Corporate Entity

A legal entity that is separate and distinct from its owners, which can own assets, incur liabilities, and conduct business.

Debt Securities

Financial instruments representing money borrowed that must be repaid, with terms that define the amount, interest rate, and maturity date.

Bonds

Fixed income investments in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period at a variable or fixed interest rate.

Convertible Bond

A type of bond that can be converted into a predetermined number of shares of the issuing company's stock.