In the Graph Shown, What Would Eliminate a Trade Deficit

question 95

Multiple Choice

In the graph shown, what would eliminate a trade deficit if there were one?

• A)The exchange rate appreciates.
• B)Domestic reservation wages rise.
• C)Foreign wages rise relative to domestic wages.
• D)Government runs expansionary policy.

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Definitions:

Contribution Margin

The amount by which sales revenue exceeds variable costs of production, indicating how much contributes to covering fixed costs.

Variable Expenses

Costs that vary in proportion to changes in the level of activity or volume of production.

Contribution Format

A type of income statement format that separates fixed and variable costs, helping in determining the contribution margin of sold goods or services toward fixed costs and profits.

Management Performance Appraisals

The systematic evaluation of the performance of managers and the effectiveness of their leadership in achieving business objectives.