When X Increases

question 3

Multiple Choice

When x increases

• A)IS curve shifts to the left.
• B)IS curve shifts to the right.
• C)LM curve shifts upward.
• D)LM curve shifts downward.

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Definitions:

Contribution Margin Ratio

The contribution margin ratio is a financial metric indicating the proportion of sales revenue that exceeds variable costs and is available to cover fixed costs and generate profit.

Fixed Costs

Outlays for rent, salaries, and insurance that are unaffected by variations in the volume of production or sales.

Sales Dollars

A term referring to the total revenue generated from the sale of goods or services, expressed in monetary value.

High-Low Method

A method employed in cost accounting that calculates estimated variable and fixed costs using the highest and lowest activity levels.