If Aggregate Expenditures Are Less Than Current Output

question 268

Multiple Choice

If aggregate expenditures are less than current output:

• A) businesses will cut back on output.
• B) businesses will produce more.
• C) employment levels will rise.
• D) inflation results.

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Definitions:

Capacity

It is the maximum level of output that a company can sustain to produce in a given period under normal conditions.

Job-Order Costing

A costing methodology that calculates the cost of individual jobs or batches, useful in manufacturing or service industries where jobs are distinct and have varying requirements.

Automated Shaper

A machine tool that uses computer control to shape or cut materials with precision, often used in manufacturing.

Gross Margin

The difference between sales revenue and the cost of goods sold before deduction of selling, general, and administrative expenses.