The Impact of Crowding Out

question 134

Multiple Choice

The impact of crowding out

• A)is larger in a closed economy as compared to an open economy.
• B)is larger in an open economy as compared to a closed economy.
• C)is larger in an open economy as compared to a closed economy when fiscal policy is contractionary.
• D)is larger in a closed economy as compared to an open economy when fiscal policy is contractionary.
• E)is larger in a closed economy for expansionary fiscal policy, but larger in an open economy for contractionary fiscal policy.

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Definitions:

Fixed Factory Overhead Volume Variance

The difference between the budgeted and actual fixed overhead incurred due to variance in production volume.

Standard Fixed Overhead Cost

The predetermined amount of fixed costs that are expected to be incurred to support operations, typically fixed for a specific period.

Direct Materials Quantity Variance

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

Price Variance

The difference between the expected price and the actual price paid for an item.