In a Small Open Economy, Policies That Increase

question 12

Multiple Choice

In a small open economy, policies that increase:

• A) investment tend to cause a trade surplus.
• B) investment tend to cause a trade deficit.
• C) saving do not affect the trade balance.
• D) saving tend to cause a trade deficit.

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Definitions:

Isolating Variances

A process in managerial accounting for identifying and analyzing differences between actual and expected performance.

Direct Materials

Raw materials directly traceable and assignable to a manufactured product as it is being produced.

Direct Labour

The labor costs directly attributable to the production of goods or the provision of services.

Materials Price Variance

The difference between the actual cost of materials and the standard cost, indicating how much was saved or overspent on materials.