In an Open Economy,an Increase in Savings Because of Concerns

question 90

Multiple Choice

In an open economy,an increase in savings because of concerns about the future should cause the domestic real interest rate to ________ and should cause net exports to ________.

• A)rise; rise
• B)rise; fall
• C)fall; rise
• D)fall; fall

---

Definitions:

Variable Overhead

Expenses that fluctuate with production volume, including costs like utilities and indirect labor, that are not directly tied to specific units of production.

Absorption Costing

A costing technique that incorporates every element of manufacturing expenditure, such as direct materials, direct labor, along with variable and fixed manufacturing overheads, into the pricing of a product.

Product Unit Cost

The total cost associated with producing a single unit of a product, including direct and indirect costs.

Direct Labor

Labor costs directly tied to the production of goods or services, such as wages of workers on the assembly line.