Since Germany Is a Large Open Economy,the Increase in German

question 12

Multiple Choice

Since Germany is a large open economy,the increase in German borrowing and investment in what was formerly East Germany in the early 1990s resulted in

• A) a decline in the world real interest rate.
• B) a shift to the right in the German supply of loanable funds curve.
• C) an increase in the real interest rate in the United States.
• D) a shift to the left in the German demand for loanable funds curve.

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Definitions:

Operating Loss

A situation where a company's operating expenses exceed its revenue, indicating that it is not making a profit from its core business activities.

Variable Costs

Costs that vary directly with the level of production or sales volume.

Fixed Costs

Fixed costs include payment for rent, employee salaries, and insurance expenses, which do not vary with production or sales volume.

Operating Income

A measure of a company's profitability from its regular business operations, excluding income and expenses from non-operating activities.