A Public Expenditure That Has to Be Approved Each Year

question 72

Multiple Choice

A public expenditure that has to be approved each year is called:

• A) discretionary spending.
• B) nondiscretionary spending.
• C) entitlement spending.
• D) earmarked spending.

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Definitions:

Cost-based Pricing

Cost-based pricing is a pricing strategy where the selling price of a product is determined by adding a profit margin to the cost of making or buying the product.

Skimming Pricing

A pricing strategy involving setting high prices at the launch of a new product to maximize profits from customers willing to pay more, before lowering the price over time.

Prestige Pricing

A pricing strategy where prices are set higher than normal because the product or service is perceived to have a prestigious status or high quality.

Total Variable Costs

The summation of all costs that vary with the level of output or production, such as materials and labor.