Deflation Generally Occurs When Which of the Following Occurs

question 12

Multiple Choice

Deflation generally occurs when which of the following occurs?

• A)the consumer price index is greater than the GDP deflator
• B)the consumer price index decreases
• C)the rate of inflation falls, for example, from 4% to 2%
• D)nominal GDP does not change

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Definitions:

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process, used as a base for allocating overheads.

Direct Labor Rate

The cost per hour for direct labor, typically used in calculating the total direct labor cost for a product or job.

Direct Labor Budget

A financial plan that estimates the cost of direct labor required to meet production goals within a specific period.

Direct Labor Rate

The cost per hour for direct labor applied to the production of goods or services.