When There Are Two Large Open Economies,if Desired International Borrowing

question 10

Multiple Choice

When there are two large open economies,if desired international borrowing by the domestic country exceeds desired international lending by the foreign country,then

• A)domestic investment must fall.
• B)domestic investment must rise.
• C)the world real interest rate must fall.
• D)the world real interest rate must rise.

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Definitions:

Cost Drivers

Factors that cause variations in the cost of an activity or process, used in activity-based costing to allocate overhead costs more accurately.

Profit Center

A branch or division of a company that is directly responsible for generating a significant portion of the company's profits.

Support Department Allocations

The process of distributing the costs of support departments (e.g., human resources, maintenance) to producing departments based on their usage of services.

Operating Income Before

Income generated from normal business operations before deductions such as taxes and interest.