The Major Factor Affecting a Nation's Balance of Payments Is

question 7

Multiple Choice

The major factor affecting a nation's balance of payments is

• A) an increase in its rate of unemployment.
• B) its rate of inflation relative to the rate of inflation of its trading partners.
• C) a change in the productivity of its labor.
• D) its stock market movements.

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Definitions:

Contribution Margin Ratio

A measurement that shows how much of a company's revenue is available to cover fixed expenses and generate profit after variable costs are covered.

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business, such as rent, salaries, and insurance premiums.

Profit Ratio

A financial metric that measures the amount of profit generated by a business relative to aspects of its operations, such as sales.

Break-even Sales

The amount of revenue required to cover total fixed and variable costs, resulting in a profit of zero.