As the Price Level Rises

question 66

Multiple Choice

As the price level rises

• A) the average price of all goods and services falls.
• B) total output demanded rises proportionately.
• C) interest rates rise if the money supply is held constant.
• D) the aggregate supply curve shifts back and forth.
• E) the demand for money falls.

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Definitions:

Standard Quantity

The expected or budgeted quantity of materials, labor, or overheads necessary for producing a unit of production or service under specified conditions.

Standard Price

A predetermined cost that companies use as a benchmark to measure the performance of actual costs.

Fixed Overhead Volume Variance

The difference between the budgeted and applied fixed manufacturing overhead, based on the standard volumes expected to be produced.

Standard Quantity

The expected quantity of materials or inputs required for production under normal conditions.