According to the Budget Philosophy of Functional Finance, _____

question 150

Multiple Choice

According to the budget philosophy of functional finance, _____

• A) the budget should be balanced annually.
• B) surpluses should be run during periods of prosperity and deficits should be run during recessions.
• C) the government budget should be whatever is necessary to have an economy operate at potential GDP.
• D) the budget should never be in balance.
• E) the rate of growth in the national debt should equal the rate of growth in the money supply.

Distinguish between raw materials, work-in-process, and finished goods inventory.

Explain the role of manufacturing overhead and its components.

Understand how to calculate cost of goods sold (COGS) from manufacturing data.

Differentiate between manufacturing and non-manufacturing costs.

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Definitions:

Initial Franchise Fee

A one-time charge that a new franchisee pays to the franchiser for the rights to operate a franchise, covering initial training, support, and access to the business model.

Material Services

Significant or essential services provided that contribute directly to the output of the production process or operational efficiency.

Franchisor

An entity that grants the right to use a brand, product, or operational model to an individual or entity (franchisee), typically for a fee.

Bundled Sales

The practice of selling multiple products or services together as a single combined offering, often at a discounted rate.