A Cost That Changes in Total as the Level of Activity

question 36

Multiple Choice

A cost that changes in total as the level of activity changes is known as which of the following?

• A)fixed cost.
• B)direct cost.
• C)indirect cost.
• D)variable cost.

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Definitions:

International Monetary Fund

An international organization created for the purpose of promoting global monetary and exchange stability, facilitating the expansion and balanced growth of international trade, and assisting in the establishment of a multilateral system of payments for current transactions.

Inflation

The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

Price Level

The central value of current prices for each good and service in the economy.

Value of Money

The purchasing power of money, which varies with inflation and economic conditions, indicating how much goods and services money can buy.