The International Fisher Effect Is Valid in the Long Run

question 83

Multiple Choice

The international Fisher effect is valid in the long run, because:

• A)Inflation rates are equal in different countries
• B)Investors will move their money into countries with high real interest rates
• C)Investors will move their money into countries with high nominal interest rates
• D)Investors will move their money into countries with low inflation

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Definitions:

Machine-Hours

An indicator of manufacturing productivity that calculates the total hours machinery is active in the production cycle.

Manufacturing Overhead

Refers to all the costs associated with the manufacturing process except for direct materials and direct labor.

Variable Manufacturing Overhead

Variable manufacturing overhead includes expenses that fluctuate with production levels, such as materials and utility costs directly associated with manufacturing.

Fixed Manufacturing Overhead

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance for manufacturing facilities.