In Macroland Potential GDP Equals $20 Billion and Real GDP

question 142

Multiple Choice

In Macroland potential GDP equals $20 billion and real GDP equals $19.2 billion. Macroland has a(n) ______ gap.

• A) expansionary
• B) potential
• C) no
• D) recessionary

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Definitions:

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the quantity expected, multiplied by the standard cost per unit.

Standard Quantity

The expected amount of materials or input needed to produce a unit of output.

Actual Materials

The actual amount of materials used in the production process, measured in physical units or cost.

Standard Price

A predetermined cost for a unit of material, labor, or overhead anticipated in the budgeting process, against which actual costs are compared.