Figure 35-2 Use the Pair of Diagrams Below to Answer the Following

question 13

Multiple Choice

Figure 35-2
Use the pair of diagrams below to answer the following questions.
-Refer to Figure 35-2.If the economy starts at C and 1,then in the short run,an increase in government expenditures moves the economy to

• A)B and 2.
• B)B and 3.
• C)B and 3
• D)None of the above is correct.

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Definitions:

Period Cost

Expenses that are incurred by a business during a specific period but are not directly tied to the production process, such as administrative and selling expenses.

Property Taxes

Taxes paid by property owners to local or state authorities based on the assessed value of their property.

Direct Materials

Raw materials that can be directly traced to the manufacturing of a product and are an essential component of the finished product.

Direct Labor

The cost of workers who are directly involved in producing goods or providing services.