The IS Curve Would Unambiguously Shift Up and to the Right

question 7

Multiple Choice

The IS curve would unambiguously shift up and to the right if there were

• A)an increase in both government purchases and corporate taxes.
• B)an increase in both government purchases and the expected future marginal product of capital.
• C)an increase in the expected future marginal product of capital and a decrease in expected future output.
• D)a decrease in both corporate taxes and the expected future marginal product of capital.

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Definitions:

Activity Cost Pool

A grouping of all costs associated with a particular activity, used in activity-based costing to allocate costs accurately to products or services.

Total Overhead Applied

The total amount of overhead costs allocated to products or services during a specific period, based on the predetermined overhead rate.

Overhead Allocation

The process of distributing overhead costs, such as rent and utilities, to different departments or production processes within a company.

Direct Labor-Hours

This term is a measure of labor time directly involved in the manufacturing process, used for allocating labor costs to units produced.