Functional Finance

question 14

Multiple Choice

Functional finance:

• A)is designed to increase the MPC in the interest of greater macroeconomic stability
• B)leads to annually balanced budgets
• C)treats the government budget primarily as a means of stabilizing the economy
• D)is defended by those economists who are most sceptical of fiscal policy's effectiveness
• E)leads to cyclically balanced budgets

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Definitions:

Plant Manager's Salary

A fixed cost not directly tied to the level of production or sales, representing the compensation of the individual overseeing the operations of a manufacturing facility.

Factory Overhead

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

Direct Materials

Raw materials that can be directly attributed to the production of a product.

Direct Labor

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