-Based on the Keynesian Cross Diagram Above,if Output Equals 4,500,planned

question 19

Multiple Choice

-Based on the Keynesian cross diagram above,if output equals 4,500,planned aggregate expenditure is ________ output and firms will _________ production.

• A) greater than;increase
• B) greater than;decrease
• C) equal to;not change
• D) less than;increase
• E) less than;decrease

---

Definitions:

Variable Manufacturing Overhead

The portion of overhead costs that varies with production volume, including utilities and indirect labor expenses related to manufacturing.

Fixed Manufacturing Overhead

Costs in manufacturing that do not vary with the level of production output, such as salaries of managers and depreciation of factory equipment.

Machine-Hours

A metric for the amount of time a machine is operational, typically used in manufacturing processes.

Fixed Costs

Costs that do not vary with the level of production or sales over a short period, such as rent, salaries, and insurance.