Which One of the Following Statements Is MOST Accurate

question 4

Multiple Choice

Which one of the following statements is MOST accurate?

• A) In the long run, foreign output depends only on the available domestic supplies of factors of production.
• B) In the short run, domestic output depends only on the available domestic supplies of factors of production.
• C) In the long run, domestic output depends only on the available domestic supplies of factors of production.
• D) In the long run and in the short run, domestic output depends only on the available domestic supplies of factors of production.
• E) In the long run, domestic output depends only on the real exchange rate.

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Definitions:

Effective-interest Method

A technique used in finance to calculate the actual interest rate on a bond or loan, taking into account the effect of compounding over the period.

Interest Expense

The cost incurred by an entity for borrowed funds; it is a non-operating expense shown on the income statement.

Straight-line Amortization

A method of reducing the carrying amount of an intangible asset over a fixed period of time in a systematic and rational manner.

Premium Amortization

The gradual expense or reduction of the premium paid above the par value of a debt security over its remaining term.