If the Government Does Not React to a Recession

question 154

Multiple Choice

If the government does not react to a recession:

• A) the economy will remain out of its long-run equilibrium indefinitely.
• B) the economy will recover, but much more slowly.
• C) voters and consumers are likely to be happy with less government interference.
• D) the government generally doesn't engage in any policy during a recession.

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Definitions:

Annual Overhead

The total expenses incurred by a business to operate over the course of a year, excluding direct labor and materials costs.

Direct Labor Hours

Direct labor hours are the total hours worked by employees directly involved in the production of goods or services.

Overhead Rate

The rate at which indirect costs are allocated to produced goods or services.

Direct Labor Dollar

The total cost of wages paid to workers who are directly involved in the production of goods or delivery of services.