An Unexpected Increase in Aggregate Demand

question 249

Multiple Choice

An unexpected increase in aggregate demand

• A)causes the price level to fall and the unemployment rate to rise.
• B)causes the price level to fall and the unemployment rate to fall.
• C)causes the price level to rise and the unemployment rate to rise.
• D)causes the price level to rise and the unemployment rate to fall.

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Definitions:

Direct Labor-Hour

A unit measuring the time workers who are directly involved in the production process spend on creating a unit of product.

Underapplied Overhead

A situation where the allocated overhead cost is less than the actual overhead incurred, leading to insufficient cost recovery.

Direct Labor-Hours

The total hours of labor directly involved in producing goods or delivering services.

Underapplied Overhead

Occurs when the overhead assigned to products is less than the overhead actually incurred, leading to a shortfall that needs to be addressed in cost accounting.