The Massive Use of Credit Default Swaps

question 7

Multiple Choice

The massive use of credit default swaps

• A) reduced the risk of nationwide collapse of real estate prices.
• B) created mortgage-backed securities with different risks.
• C) created a global savings glut.
• D) reduced the risk of regional collapse of real estate prices.
• E) allowed the Bush tax cuts of 2001.

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Definitions:

Machine Hours

A measure of the amount of time a machine is used in the production process, often used as a basis for allocating manufacturing overhead costs.

Plantwide Overhead Rate Method

A method of allocating manufacturing overhead costs to products based on a single, plant-wide rate, often using direct labor hours or machine hours as the allocation base.

Cost Objects

Any item for which a separate measurement of costs is desired; examples include a product, a service, a project, or a customer.

ABC

Can refer to Activity-Based Costing, a method of assigning costs to products or services based on the resources they consume.