Which of the Following Does Purchasing-Power Parity Imply

question 55

Multiple Choice

Which of the following does purchasing-power parity imply?

• A)The purchasing power of the dollar is the same in the U.S.as in foreign countries.
• B)The price of domestic goods relative to foreign goods cannot change.
• C)The nominal exchange rate is the ratio of U.S.prices to foreign prices.
• D)All of the above are correct.

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Definitions:

Direct Materials Cost Variance

The difference between the budgeted cost of materials and the actual cost incurred for materials used in production.

Standard Materials Cost

The budgeted or estimated cost of raw materials required for production, used for cost control and variance analysis.

Material Used

The raw materials that have been consumed in the production process to create goods.

Total Labor Cost Variance

This refers to the difference between the actual labor costs incurred and the standard labor costs for the actual production levels.