Monetary Policy Can Best Cure a Recession By

question 12

Multiple Choice

Monetary policy can best cure a recession by:

• A) Reducing interest rate,which shifts aggregate supply to the left.
• B) Reducing interest rate,which shifts aggregate demand to the right.
• C) Raising interest rate,which shifts aggregate supply to the right.
• D) Raising interest rate,which shifts aggregate demand to the left.

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Definitions:

Direct Labor Standards

The expected labor time and cost that should be incurred under normal conditions to produce a unit of output.

Labor Rate Variance

The difference between the actual cost of direct labor and the estimated cost of direct labor at standard rates for the production achieved.

Labor Efficiency Variance

The difference between the actual hours worked to produce goods and the standard hours expected, multiplied by the standard labor rate, indicating efficiency in labor use.

Material Price Variance

The variance between the real price paid for materials and their anticipated (standard) price.