Which of the Following Would Be Most Likely to Lead

question 16

Multiple Choice

Which of the following would be most likely to lead to higher interest rates on all debt securities in the economyσ

• A) households start saving a larger percentage of their income.
• B) the economy moves from a boom to a recession.
• C) the level of inflation begins to decline.
• D) corporations step up their expansion plans and thus increase their demand for capital.
• E) the federal reserve uses monetary policy in an attempt to stimulate the economy.

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Definitions:

Machine-Hours

A measure of the amount of time a machine is operated, used in allocating machine costs to units of production.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead to individual products or job orders based on a certain activity base, such as machine hours or labor hours.

Machine-Hours

A unit of measure that represents the operational time of a machine, used in allocating manufacturing overhead based on the time machines are run.

Plantwide Predetermined

A rate, often related to overhead costs, that is set before the accounting period begins and applied uniformly throughout an entire plant or organization.