When an American Buys a Swedish Financial Asset

question 29

Multiple Choice

When an American buys a Swedish financial asset,

• A)both c and d
• B)the U.S.balance of goods and services worsens
• C)the U.S.capital account balance declines
• D)the U.S.balance of payments worsens
• E)the U.S.trade balance worsens

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Definitions:

Fixed Cost

Expenses that do not change with the volume of production or business activity, such as rent, salaries, and insurance premiums.

Production Increases

A rise in the amount or level of output that a production system generates over a specific period.

High-low Method

A cost accounting technique used to estimate variable and fixed costs based on the highest and lowest levels of activity within a given period.

Variable Cost

Costs that vary directly with the level of production or sales volume. They include raw materials, labor directly involved in production, and sales commissions.