Business Cycle Fluctuations Typically Arise Because

question 117

Multiple Choice

Business cycle fluctuations typically arise because:

• A) The actual supply of goods and services ends up being more or less than what consumers were expecting
• B) The actual demand for goods and services ends up being more or less than the expected supply of goods and services
• C) The actual demand for goods and services ends up being more or less than what firms were expecting
• D) Prices tend to be flexible in the short run

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Definitions:

Direct Labor Rate

The cost per hour for labor directly involved in the manufacturing process of a product.

Master Budget

A comprehensive financial plan made up of various individual budgets that outline a company's sales, production, and financial goals.

Raw Materials

Basic materials that are used in the manufacturing process to create finished goods.

Finished Goods Inventory

The stock of completed products that are ready to be sold but have not yet been sold.