Suppose There Were a Large Decline in Net Exports

question 35

Multiple Choice

Suppose there were a large decline in net exports.If the Fed wanted to stabilize output,it could

• A)buy bonds to raise interest rates.
• B)buy bonds to lower interest rates.
• C)sell bonds to raise interest rates.
• D)sell bonds to lower interest rates.

---

Definitions:

Materials And Labor

Costs associated with the direct materials and labor required to produce a good or service; key components of the manufacturing process.

Conversion Costs

Costs incurred to convert raw materials into finished goods, typically including direct labor and manufacturing overhead expenses.

Direct Labor

The cost of wages for employees who are directly involved in the manufacturing or production of goods.

Factory Overhead

All indirect costs associated with manufacturing beyond direct materials and direct labor, such as utilities, maintenance, and depreciation.