With Fixed Exchange Rates,the Adjustment to Changes in International Monetary

question 10

Multiple Choice

With fixed exchange rates,the adjustment to changes in international monetary conditions comes through

• A)exchange rate changes.
• B)exchange rate changes and international money flows.
• C)international money flows.
• D)None of the above.

---

Definitions:

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales activities, such as rent, salaries, and insurance.

Contribution Margin

The sales price minus the variable costs of a product, indicating how much selling one more unit adds to profit.

Variable Costs

Costs that vary directly with the level of production or volume of output, such as raw materials and direct labor.

Fixed Costs

Costs that remain constant regardless of the volume of goods or services produced by a business.