Which of the Following Views Are Consistent with the Case

question 67

Multiple Choice

Which of the following views are consistent with the case for nondiscretionary macroeconomic policy?

• A)Even with time lags,discretionary policy moves the economy to full employment before the economy's self-correcting mechanism would.
• B)The wage and price adjustment process being extremely slow,a nondiscretionary policy results in a large loss of output.
• C)Workers will come to expect expansionary policies whenever the economy moves below full employment.
• D)A discretionary,accommodating policy of shifting the aggregate demand curve will produce less volatility in both the price level and output due to the short time it takes to shift aggregate demand.

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Definitions:

Predetermined Overhead Rate

A predetermined rate employed to allocate estimated manufacturing overhead costs to products, calculated before the period starts, using projected costs and activity levels.

Direct Labour Hour

A measure of labor that directly contributes to the production of goods, used in calculating labor costs and efficiency.

Manufacturing Overhead

All manufacturing costs that are not directly associated with the production of a product, including costs related to indirect materials, indirect labor, and other indirect expenses.

Overapplied Overhead

This occurs when the overhead allocated to products or job orders during a period exceeds the actual overhead costs incurred.