In the Income-Expenditure Model,inventories Are

question 104

Multiple Choice

In the income-expenditure model,inventories are:

• A) fixed and therefore provide little insight into the direction of the economy.
• B) a long-run event that aids forecasters in understanding where long-run real GDP is.
• C) constantly changing and provide insight into the future of the economy.
• D) often positive,suggesting that additions to inventory stocks are a long-run goal.

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Definitions:

Direct Labor-Hours

A measure of the amount of time spent by workers directly involved in the manufacturing process, used in calculating labor costs and efficiency.

Journal Entry

A record in the accounts of a business, documenting a financial transaction with both debit and credit parts.

Direct Labor Costs

Expenses associated directly with the manufacturing of a product, including wages of workers actually making the product.

Indirect Labor Costs

Costs associated with employees who do not directly work on the product but are necessary for the manufacturing process.