Which of the Following Will Most Likely Occur During the Contractionary

question 111

Multiple Choice

Which of the following will most likely occur during the contractionary phase of a business cycle?

• A) Real GDP rises, and the unemployment rate falls.
• B) Real GDP declines, and the rate of inflation rises.
• C) The sales of most businesses decline, and the unemployment rate rises.
• D) Inflation rises, and employment/population ratio falls.

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Definitions:

Conversion Cost

The sum of direct labor and manufacturing overhead costs, representing the expenses to convert raw materials into finished goods.

Direct Materials

The raw materials and components that are directly used in the production of a product and can be easily associated with it.

Fabrication Department

A specialized division within a company responsible for the manufacturing and assembly of products or components.

Weighted-Average Method

A technique for calculating the cost of goods sold and remaining stock that uses the mean cost of all available units for sale.