Wage and Price Controls

question 41

Multiple Choice

Wage and price controls

• A) are an effective means to control strong cost-push inflation over the long haul.
• B) are an easy and inexpensive means to contain inflation.
• C) typically are enthusiastically supported by labor unions.
• D) ultimately break down if monetary and fiscal policies are overly expansive.
• E) are least desirable during a period of all-out war or other national emergency.

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Definitions:

Variable Costing

An accounting method that includes only variable production costs (materials, labor, and overhead) in product costs, with fixed overhead costs being treated as period expenses.

Australian Accounting Standards

The principles and guidelines set by the Australian Accounting Standards Board that govern the reporting and financial practices of entities in Australia.

Net Profit

The amount of money left after all operating expenses, taxes, and interest have been deducted from total revenue.

Absorption Costing Profit

The profit calculated under absorption costing, which includes both variable and fixed manufacturing costs in the cost of a product.