In the Open-Economy Macroeconomic Model,if the Supply of Loanable Funds

question 34

Multiple Choice

In the open-economy macroeconomic model,if the supply of loanable funds shifts left

• A)the interest rate rises and the supply of dollars in the market for foreign currency exchange shifts right.
• B)the interest rate rises and the supply of dollars in the market for foreign currency exchange shifts left.
• C)the interest rate falls and the demand for dollars in the market for foreign currency exchange shifts right.
• D)the interest rate falls and the demand for dollars in the market for foreign currency exchange shifts left.

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Definitions:

Variable Costing

An accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs and treats fixed manufacturing overhead as a period expense.

Contribution Format

A method of profit reporting that separates fixed and variable costs, highlighting the contribution margin of products, services, or business segments.

Variable Costing

A technique in managerial accounting where only variable production costs are charged to product units, differentiating it from absorption costing by not including fixed overhead.

Absorption Costing

A cost accounting method that includes all manufacturing costs, including both fixed and variable, in the cost of a product.