A Small Country Is a Net Foreign Lender and Its

question 126

Multiple Choice

A small country is a net foreign lender and its domestic supply of loanable funds increases.Consequently,the equilibrium quantity of loanable funds used in the country ________ and the country's foreign lending ________.

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

---

Definitions:

Predetermined Overhead Rate

A rate used to charge manufacturing overhead cost to jobs that is established in advance for each period. It is computed by dividing the estimated total manufacturing overhead cost for the period by the estimated total amount of the allocation base for the period.

Costing System

A method for assessing and allocating costs of production, typically involving direct costs, indirect costs, and overheads.

Washing Mitt

A tool made of soft material used for washing surfaces, typically vehicles, without causing scratches.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on the activities they require.