A Country's Budget Constraint States That

question 59

Multiple Choice

A country's budget constraint states that

• A) the value of exports must be equal to the value of imports.
• B) real income in the exporting country must be equal to real income in the importing country.
• C) unless a country engages in trade, the value of exports cannot exceed the value of goods produced.
• D) a country will engage in trade only if the value of imports exceed the value of exports.
• E) a country will engage in trade only if the value of exports exceeds the value of imports.

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Definitions:

Manufacturing Overhead

Costs, other than direct materials and direct labor costs, that are incurred in the manufacturing process.

Direct Labor Hours

The time spent by workers directly involved in the production process of goods or services, often used to allocate labor costs to products.

Overapplied

A situation in cost accounting when the allocated or applied costs exceed the actual costs incurred.

Underapplied

In cost accounting, it refers to a situation where the allocated costs are less than the actual costs incurred.