Other Things Being Equal, an Increase in Consumption Spending Implies

question 198

Multiple Choice

Other things being equal, an increase in consumption spending implies

• A) a decline in saving.
• B) a decline in government spending.
• C) a higher standard of living in the future.
• D) that economic growth will soon increase.

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Definitions:

Accounts Receivable

Amounts due to a firm from its customers for delivered services or products that remain unpaid.

Factory Overhead

Refers to the indirect manufacturing costs that are not directly tied to the production of goods, such as utilities, maintenance, and rent of the factory building.

Direct Labor Costs

Expenses related to the wages of employees who are directly involved in the production of goods or delivery of services.

Cost of Materials Used

The total cost of raw materials that have been consumed in the production process, directly contributing to the manufacture of products.