In the Following Table for a Hypothetical Country, C Is

question 64

Multiple Choice

In the following table for a hypothetical country, C is consumption, I is investment, G is government purchases, X is exports, and M is imports. All figures in columns (2) to (6) are in billions of dollars

$\begin{array} { | c | c | c | c | c | c | } \hline \begin{array} { c } ( 1 ) \\\text { Price } \\\text { Level }\end{array} & \begin{array} { c } ( 2 ) \\\mathrm { C }\end{array} & \begin{array} { c } ( 3 ) \\\mathrm { I }\end{array} & \begin{array} { c } ( 4 ) \\\mathrm { G }\end{array} & \begin{array} { c } ( 5 ) \\\mathrm { X }\end{array} & \begin{array} { c } ( 6 ) \\\mathrm { M }\end{array} \\\hline 128 & \$ 18 & \$ 2 & \$ 3 & \$ 4 & \$ 5 \\\hline 125 & 20 & 4 & 3 & 4 & 4 \\\hline 122 & 22 & 6 & 3 & 4 & 3 \\\hline 119 & 24 & 8 & 3 & 4 & 2 \\\hline 116 & 26 & 10 & 3 & 4 & 1 \\\hline\end{array}$
-If equilibrium real output is $32 billion in this country,the equilibrium price level will be:

• A)128
• B)122
• C)125
• D)119
• E)116

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Definitions:

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate manufacturing overhead costs to individual units of production based on a particular activity base.

Moving Average Basis

Moving average basis is a method for evaluating or forecasting trends by averaging data points within a specific period to smooth out short-term fluctuations.

Actual Overhead Costs

The real, incurred expenses related to the indirect costs of operating a business, such as utilities, rent, and administrative expenses.

Overhead Application Rate

The rate used to allocate indirect costs to products or services based on a predetermined formula, such as labor hours or machine hours.