Which of the Following Factors Was Most Responsible for Making

question 14

Multiple Choice

Which of the following factors was most responsible for making America's sub-prime mortgage crisis into a global recession?

• A) Rapidly increasing U.S. unemployment.
• B) Growing economic interdependence.
• C) The size of the U.S. budget deficit.
• D) The rapid increase in U.S. home prices.

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Definitions:

Unit Variable Costs

Costs that vary directly with the volume of production or sales, such as materials and labor, on a per-unit basis.

Contribution Margin Ratio

A financial metric that measures the portion of revenue remaining after variable production costs that can contribute to covering fixed costs and generating profit.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit, indicating how much each unit sold contributes to fixed costs and profit.

Variable Costs

Expenses that fluctuate in proportion to the activity or quantity of goods produced.