To Favor a Passive Approach to Policy Is to Believe

question 162

Multiple Choice

To favor a passive approach to policy is to believe that the private sector is

• A)relatively stable and both wages and prices adjust quickly to eliminate excess supply or excess demand for labor
• B)basically unstable,although both wages and prices adjust quickly to eliminate excess supply or excess demand for labor
• C)relatively stable,although both wages and prices tend to be very sticky downward
• D)basically unstable and both wages and prices tend to be very sticky downward
• E)so stable that wages and prices rarely change

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Definitions:

Fixed Costs

Regular expenses that an entity incurs, which are not affected by changes in business activity levels, such as lease payments and insurance premiums, essential for financial planning.

Machine Setup Costs

Expenses incurred to prepare machinery for production, including calibration, cleaning, and testing.

Batch Level

Refers to the classification in cost accounting that associates costs with specific batches of goods or services rather than with individual units or processes.

Unit-level Costs

Costs that are incurred for every unit produced, directly proportional to the production volume.