Expansionary Fiscal Policy Should Shift the

question 37

Multiple Choice

Expansionary fiscal policy should shift the

• A) aggregate demand curve to the left.
• B) aggregate demand curve to the right.
• C) short-run aggregate supply curve to the left.
• D) short-run aggregate supply curve to the right.

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Definitions:

Variable Costing

An accounting method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product costs, excluding fixed overhead costs.

LIFO Inventory

A method of inventory valuation where the most recently produced or acquired items are recorded as sold first, standing for Last In, First Out.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) in the cost of a product.

Variable Costing

A costing approach where variable costs are assigned to inventory and fixed costs are treated as expenses in the period they are incurred, focusing on the costs that change with production levels.