Stabilization Policies Are Government Policies Used to Affect ________, with the Objective

question 24

Multiple Choice

Stabilization policies are government policies used to affect ________, with the objective of eliminating output gaps.

• A)planned aggregate expenditure
• B)potential output.
• C)labor productivity.
• D)diminishing returns to capital.

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Definitions:

Contribution Margin

Contribution margin represents the amount by which sales revenue exceeds variable costs, indicating how much revenue is contributing to covering fixed costs and generating profit.

Net Income

The net income of a business following the deduction of all taxes and expenses from its overall revenue.

Degree of Operating Leverage

A financial ratio that measures the sensitivity of a company's operating income to its sales volume, indicating how a change in sales will affect profits.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenue.