According to the Assignment Rule, Which of the Following Policy

question 7

Multiple Choice

According to the assignment rule, which of the following policy mixes is appropriate for a country with high inflation, a balance of payments surplus, and fixed exchange rates?

• A)Contractionary fiscal policy and contractionary monetary policy
• B)Contractionary fiscal policy and expansionary monetary policy
• C)Expansionary fiscal policy and expansionary monetary policy
• D)Expansionary fiscal policy and contractionary monetary policy

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Definitions:

Absorption Costing

A costing method where all manufacturing costs, both fixed and variable, are allocated to products, thus "absorbing" them into the cost of goods sold.

Markup

The supplementary amount factored into the base price of goods to address fixed costs and earnings, influencing their final selling point.

Selling Price

The price a consumer disburses to obtain a product or service from a merchant.

Absorption Costing

An accounting method that includes all manufacturing costs—both variable and fixed—in the cost of goods sold, for product pricing.