Which of the Following Is True

question 50

Multiple Choice

Which of the following is true?

• A) The close link between personal income and provision of productive resources to others provides individuals with a strong incentive to develop skills.
• B) Income can be taxed away from some and transferred to others without altering the incentive to engage in productive activities.
• C) Holding technology constant, the size of the economic pie available for distribution among economic participants is fixed.
• D) In a democratic setting, the government's tax and spending policies can redistribute income without influencing the size of the economic pie.
• E) Both b and d are correct.

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Definitions:

Manufacturing Overhead

All indirect manufacturing costs, including indirect labor, materials, and other expenses not directly tied to the production of goods.

Finished Goods

Finished goods refer to completed products that are ready for sale but have not yet been sold to customers.

Direct Materials Cost

The expense associated with raw materials that are directly included in the manufacturing of a product, an important component of total production cost.

Work in Process Account

A financial account found in the ledgers of manufacturing companies where costs related to the production process that are not yet complete are recorded.