Which Approach Analyzes a Nation's Balance of Payments in Terms

question 106

Multiple Choice

Which approach analyzes a nation's balance of payments in terms of money demand and money supply?

• A) Expenditures approach
• B) Absorption approach
• C) Elasticities approach
• D) Monetary approach

---

Definitions:

Variable Costing

An accounting method that includes only variable production costs (direct labor, direct materials, and variable manufacturing overhead) in product cost calculations.

Unit Product Cost

The cost calculated by summing all expenses (material, labor, and overhead) associated with producing a single unit of a product.

Fixed Manufacturing Overhead

Indirect manufacturing costs that remain constant regardless of the volume of production, such as salaries of supervisors and rent for factory space.

Deferred

Describes expenses or incomes that have been incurred but not yet realized, affecting financial statements in subsequent periods.