Which One of the Following Accurately States the View of Activists

question 13

Multiple Choice

Which one of the following accurately states the view of activists who favor discretionary stabilization policy?

• A) Neither monetary nor fiscal policy will exert an impact on the real level of economic activity.
• B) Since we have only limited ability to forecast the future direction of the economy, the best policy is to do nothing.
• C) Our ability to forecast the future direction of economic activity is quite good, and therefore, discretionary macroeconomic policy is now capable of eliminating fluctuations in the business cycle if policy makers would follow the advice of leading economists.
• D) The index of leading indicators and other forecasting tools provide policy makers with valuable information that permits them to institute stabilizing changes in macroeconomic policy.

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Definitions:

Direct Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standardized expected quantity, valued at the standard cost per unit.

Direct Materials

Raw materials that are directly traceable to the production of a specific product and are significant in cost.

Favorable

A term usually used in finance and accounting to describe results that are better than anticipated or that result in a benefit.

Standard Direct Materials Costs

The budgeted or standard cost of the raw materials required to produce a unit of product.