For an Investment to Be Considered Autonomous, It Must

question 126

Multiple Choice

For an investment to be considered autonomous, it must

• A) be negatively related to the interest rate.
• B) increase as the level of income increases.
• C) include fixed components.
• D) be independent of the level of real disposable income.

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Definitions:

Labor Rate Variance

The difference between the actual cost of labor and the budgeted cost of labor at the standard rate.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on standard cost accounting.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on the predetermined rate.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a specific product and included in the direct costs of production.