A Major Difference Between Committed and Discretionary Fixed Costs Is

question 94

Multiple Choice

A major difference between committed and discretionary fixed costs is that

• A)incurring committed fixed costs is less risky than using discretionary costs.
• B)managers are usually responsible for committed fixed costs but not for discretionary fixed costs.
• C)incurring discretionary fixed costs rather than committed fixed costs gives a company more flexibility in controlling costs.
• D)companies are using more discretionary fixed costs because labor is easier to "remove" than technology.

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Definitions:

Classical Economists

A group of economists in the late 18th and early 19th centuries who believed in free markets, the invisible hand guiding economies, and the theories of supply and demand.

Adam Smith

A Scottish economist and philosopher, often considered the father of modern economics, known for his works on the principles of free markets and the "invisible hand."

Quantity Theory

An economic theory that relates the quantity of money in an economy to the level of prices of goods and services.

Monetary Policy

The process by which a central bank controls the money supply, aiming at specific economic targets such as controlling inflation, stimulating economic growth, and reducing unemployment.