The Cash for Clunkers Program Was Intended to Help the US

question 47

Multiple Choice

The Cash for Clunkers program was intended to help the US auto industry and help the environment.Which of the following is often cited as a unintended consequence of the program?

• A)it removed used cars and recyclable used car parts from the market
• B)it helped Toyota surpass GM as the #1 auto maker in the world
• C)it helped used car dealers more than new car dealers
• D)it led to an acceleration of inflation in the US economy
• E)it contributed to an increase in the US trade deficit

---

Definitions:

First-In, First-Out

An inventory valuation method where the oldest stock is sold first.

Grinding Department

A specific section in a manufacturing process where grinding operations (material removal process) are performed.

Conversion Costs

Conversion costs are the costs required to convert raw materials into finished products. They include direct labor and manufacturing overhead, excluding the cost of raw materials.

Equivalent Units

Equivalent units are used in cost accounting to represent a portion of unfinished goods in a way that can be compared to complete units, facilitating the process of costing inventory.