Which Chain of Events Would Promote Payments Equilibrium for a Deficit

question 56

Multiple Choice

Which chain of events would promote payments equilibrium for a deficit nation,according to the price-adjustment mechanism?

• A) Increasing money supply--increasing domestic prices--rising imports--falling exports
• B) Increasing money supply--falling domestic prices--rising imports--falling exports
• C) Decreasing money supply--increasing domestic prices--falling imports--rising exports
• D) Decreasing money supply--decreasing domestic prices--falling imports--rising exports

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Definitions:

Absorption Costing

A costing method that includes all manufacturing costs — direct materials, direct labor, and both variable and fixed manufacturing overhead — in the cost of a product.

Variable Costing

An accounting method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in product costs.

Traceable Fixed Expenses

Fixed costs that can be directly linked to a specific product, service, or department.

Segment Margin

The amount of profit or loss generated by a specific segment of a business, considering only the revenues and expenses directly attributable to that segment.