Other Things the Same,a Decrease in the Price Level Motivates

question 87

Multiple Choice

Other things the same,a decrease in the price level motivates people to hold

• A)less money,so they lend less,and the interest rate rises.
• B)less money,so they lend more,and the interest rate falls.
• C)more money,so they lend more,and the interest rate rises.
• D)more money,so they lend less,and the interest rate falls.

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Definitions:

Materials Price Variance

The difference between the actual cost of direct materials and the expected (standard) cost multiplied by the actual quantity purchased or used.

Labour Rate Variance

The difference between the actual cost of labor and the expected (or standard) cost.

Flexible Budget

A budget that adjusts or flexes with changes in the volume or activity level of a business.