If the Time for an Economy to Self-Correct Is Shorter

question 33

Multiple Choice

If the time for an economy to self-correct is shorter than the active policy lags,

• A)active policy should be strengthened
• B)active policy will likely be destabilizing
• C)the passive policy case is weakened
• D)the aggregate demand curve shifts more rapidly than the short-run aggregate supply curve
• E)active policy will work better than passive policy

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Definitions:

Direct Labor

The work of factory employees that can be directly traced to the individual units of product.

Factory Overhead Applied

The allocation of estimated manufacturing overhead costs to individual units of production based on a predetermined rate.

Underapplied

A situation where the actual costs are higher than the costs applied or allocated, typically in manufacturing overhead.

Job Order Cost Accounting

A system used to assign production costs to an individual product or batches of products, typically when each product's design is sufficiently unique.