Refer to the Following Graph to Answer the Following Questions

question 172

Multiple Choice

Refer to the following graph to answer the following questions:
-Assuming the figure represents the market for loanable funds,which of the following would represent the government running a larger budget deficit?

• A) a shift from line 1 to line 4
• B) a shift from line 4 to line 1
• C) a shift from line 2 to line 3
• D) a shift from line 3 to line 2
• E) a new shortage of loanable funds represented by the distance from C to D

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Definitions:

Variable Costing

A costing method in accounting that only considers variable costs, which change with the level of output, in the determination of the cost of goods sold or manufacturing costs.

Fixed Production Cost

Costs that do not vary with the level of production, such as rent, insurance, and salaries of permanent staff.

Ending Inventory

The total value of all unsold goods at the end of an accounting period, including raw materials, work-in-progress, and finished goods.

Beginning Inventory

The value of a company's inventory at the start of an accounting period, before any purchases or sales have been made.