During Recession Years

question 139

Multiple Choice

During recession years,

• A)investment declines while consumption increases
• B)investment increases while consumption declines
• C)investment is constant while consumption declines
• D)investment declines much faster than GDP declines
• E)consumption declines much faster than GDP declines

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Definitions:

Direct Labor

Labor costs directly associated with the manufacture of specific goods or the delivery of specific services, representing wage expenses for personnel involved in production.

Absorption Costing

An accounting strategy where the price of manufacturing a product is determined by adding up expenses on direct materials, direct labor, and every overhead cost, be it variable or fixed.

Markup

The extra charge applied to the acquisition cost of items intended to offset operating costs and secure a profit, which defines their market price.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the net profit from the investment by its cost.