The Multiplier Effect Occurs When

question 21

Multiple Choice

The multiplier effect occurs when:

• A)spending by one person causes others to spend more too,increasing the impact of the initial spending on the economy.
• B)the level of consumer confidence increases more than predicted given a tax cut.
• C)increased spending by one or more individuals causes others to react and increase their savings.
• D)None of these is true.

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Definitions:

Equivalent Units of Production

A concept used in cost accounting to assign costs to partially completed goods, converting them into the amount of finished goods units.

Weighted-Average Process Costing System

An accounting method used to compute the cost per unit in a process environment by averaging the costs over all units produced in a period.

Equivalent Units for Materials

A metric that converts partially completed goods into the number of complete units with regard to materials only.

Equivalent Units

A concept in process costing that converts partially completed units into a number of fully completed units, facilitating cost calculation.