Why Were Johnson's 10 Percent Surtax and Nixon's Price-Control Program

question 14

Multiple Choice

Why were Johnson's 10 percent surtax and Nixon's price-control program ineffective in controlling the inflationary pressures they were designed to stop?

• A) Both programs were based on the assumption that the aggregate supply was horizontal.
• B) Both presidents misread the economic signs of the times that clearly pointed to no inflationary pressures.
• C) Both were temporary in nature and so did little to deal with strong inflationary expectations.
• D) These measures never received the approval or support of the Council of Economic Advisers.
• E) The inflationary pressures had subsided by the time these programs were enacted.

Understand the different classifications of costs including direct and indirect costs, and their implications on financial statements.

Distinguish between product costs (manufacturing costs) and period costs.

Identify specific examples of direct materials, direct labor, and manufacturing overhead.

Analyze the financial statement implications of various cost classifications.

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Definitions:

Cognitive Development

The study of how thinking, problem solving, and understanding of the world evolve from infancy through adulthood, influenced by genetics, experience, and education.

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The Preoperational stage is the second stage in Piaget's theory of cognitive development, occurring from ages 2 to 7, where children begin to engage in symbolic play but lack the ability to perform operations or see things from the perspective of others.

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