Which of the Following Weakens the Link Between Relative Price

question 104

Multiple Choice

Which of the following weakens the link between relative price changes and changes in exchange rates predicted by purchasing power parity (PPP) theory by violating the assumption of efficient markets?

• A)Government intervention in cross-border trade
• B)The relationship between money supply and price inflation
• C)The impact of increase in currency on relative demand and supply conditions of currencies
• D)Excessive growth in money supply
• E)The insignificant impact of transportation costs on international trade

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Definitions:

Direct Labor Time Variance

The difference between the estimated time to produce a good and the actual time taken, often used in cost accounting.

Actual Costs

Actual costs are the expenses that a company incurs for producing goods or services, including materials, labor, and overhead, as opposed to estimated or budgeted costs.

Standard Costs

The predetermined costs of manufacturing a product or providing a service, used as benchmarks against actual costs.

Direct Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected quantity, multiplied by the standard cost per unit of material.