If There Is a Dollar-For-Dollar Direct Expenditure Offset, Then

question 57

Multiple Choice

If there is a dollar-for-dollar direct expenditure offset, then

• A) increases in aggregate demand will also increase long-run aggregate supply.
• B) increases in government spending will not increase aggregate demand.
• C) increases in aggregate demand will increase the price level, but leave real output unchanged.
• D) increases in aggregate demand will increase real output, but leave the price level unchanged.

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Definitions:

Weighted-Average Cost Method

A costing method that assigns the cost of inventory based on the average cost of all similar items in the inventory, regardless of when they were purchased.

Blending Department

A part of a manufacturing process where ingredients are combined according to specific recipes to produce a final product.

Sequential Processes

Steps in manufacturing or service delivery that are performed in a specific order, where the completion of one step is dependent on the completion of the step before it.

Weighted-Average Method

An approach used in cost accounting to assign a cost to inventory on the basis of the average cost of all similar items held, considering their weight.