Suppose the Government of a Large Open Economy Reduces Its

question 96

Multiple Choice

Suppose the government of a large open economy reduces its spending,so that national saving increases.The result is

• A)a decrease in the foreign country's net exports.
• B)an increase in the real interest rate.
• C)an increase in the foreign country's net exports.
• D)a decrease in investment.

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Definitions:

Direct Labor-Hours

Total working hours accrued by employees integral to the manufacturing sequence.

Variable Overhead

Costs of production that vary directly with the volume of output, such as utilities and labor efficiency.

Direct Labor-Hours

The total hours worked by employees directly involved in manufacturing products, used as a basis for assigning labor costs to those products.

Manufacturing Overhead

All indirect costs associated with manufacturing, including costs for indirect labor, materials, and factory operations, that are not directly traceable to specific products.