If Economists Predict That the Inflation Will Increase, the Government

question 101

Multiple Choice

If economists predict that the inflation will increase, the government should:

• A)decrease government spending.
• B)decrease taxes.
• C)lower interest rates.
• D)conduct expansionary fiscal policy.

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Definitions:

LIFO

Last-In, First-Out, an inventory valuation method where the most recently produced items are recorded as sold first.

Ending Inventory

The cumulative worth of all unsold merchandise at the close of a financial period.

Retail Method

An accounting method used to estimate inventory value by converting the cost of goods available for sale into retail prices and then calculating ending inventory at retail prices.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated by adding purchases to beginning inventory and subtracting the cost of goods sold.