An Unexpected Decrease in Aggregate Demand

question 177

Multiple Choice

An unexpected decrease in aggregate demand

• A) causes the price level to fall and the unemployment rate to rise.
• B) causes the price level to fall and the unemployment rate to fall.
• C) causes the price level to rise and the unemployment rate to rise.
• D) causes the price level to rise and the unemployment rate to fall.

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Definitions:

Standards

Predetermined benchmarks or norms used for measuring performance or ensuring consistency and quality in various fields.

Standard Cost System

A cost accounting system that estimates costs based on standard efficiency and material usage rates, then compares them with actual costs to identify variances.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost allocated, based on the actual activity levels.

Manufacturing Overhead

All manufacturing costs except direct materials and direct labor.