Someone in Germany Has Just Ordered a U

question 85

Multiple Choice

Someone in Germany has just ordered a U.S. car to be exported to Germany. In the U.S. balance of payments, this purchase is a(n)

• A) accounting identity.
• B) special draw.
• C) surplus item.
• D) deficit item.

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Definitions:

Diseconomies of Scale

A condition in which a firm’s average costs increase as production increases.

Returns to Scale

The change in output as a result of proportionately changing all inputs in the production process, indicating increasing, constant, or decreasing returns.

Marginal Cost

An uplift in the sum total of costs incurred by producing another unit of a product or service.

Average Fixed Cost

The fixed costs of production (such as rent and salaries) divided by the number of goods produced; it decreases as output increases.