An Increase in Which of the Following Variables Will Cause

question 56

Multiple Choice

An increase in which of the following variables will cause a reduction in the demand for domestic goods?

• A)foreign income
• B)the real exchange rate
• C)consumer confidence
• D)domestic income
• E) all of the above

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Definitions:

Average Cost

A method to determine the cost of goods sold and ending inventory by computing the weighted average of the costs of all goods available for sale.

Net Sales

The total revenue from sales minus returns, allowances, and discounts.

Gross Profit

The financial gain obtained after subtracting the cost of goods sold from net sales revenues, indicating the efficiency of core business operations.

Beginning Inventory

The value of a company's inventory at the start of an accounting period, carried over from the end of the previous period.