In a Small, Open Economy, If Net Exports Are Negative

question 7

Multiple Choice

In a small, open economy, if net exports are negative, then:

• A)domestic spending is greater than output.
• B)saving is greater than investment.
• C)net capital outflows are negative.
• D)imports are less than exports.

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Definitions:

Conversion Costs

relate to expenses incurred in converting raw materials into finished goods, including labor and overhead.

Work in Process

Partially finished goods that are in the process of being converted into final products in manufacturing.

Equivalent Unit

A measure used in cost accounting to represent the amount of work done on partial units of output, making it possible to calculate costs in process costing systems.

Process Costing

A costing method used for homogenous products, where costs are accumulated for a continuous process and then assigned to units of output.