Use the Information Below to Answer the Following Questions

question 126

Multiple Choice

Use the information below to answer the following questions.
Fact 25.3.1 Aussie Dollar Hit by Interest Rate Talk
The Australian dollar fell against the U.S. dollar to its lowest value in the past two weeks. The CPI inflation rate was reported to be generally as expected but not high enough to justify previous expectations for an aggressive interest rate rise by Australia's central bank next week.
Source: Reuters, October 28, 2009
-Consider Fact 25.3.1. Australia's exchange rate policy is a flexible exchange rate. An expected rise in the Australian interest rate with no change in the Canadian interest rate, everything else remaining the same, ________ the demand for Australian dollars and ________ the supply of Australian dollars.

• A)increases; increases
• B)increases; decreases
• C)decreases; decreases
• D)decreases; increases
• E)does not change; does not change

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Definitions:

Job Cost

The total expense calculated for a specific job or project, including materials, labor, and overhead.

Unit Product Cost

The total cost to produce one unit of product, including labor, materials, and overhead.

Predetermined Overhead Rate

A rate calculated prior to the accounting period that is used to allocate overhead costs to products or job orders, based on estimated overhead costs and an allocation base.

Job-Order Costing

A cost accounting system that accumulates costs according to specific jobs or orders, allowing for detailed cost tracking.