________ Is Seen as a Way to Stimulate Gains in Economic

question 65

Multiple Choice

________ is seen as a way to stimulate gains in economic efficiency by giving owners a powerful incentive-the reward of greater profits-to search for increases in productivity, to enter new markets, and to exit losing ones.

• A) Globalization
• B) Economic transformation
• C) Deregulation
• D) Privatization

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Definitions:

Degree of Operating Leverage

A metric that measures a company's sensitivity of operating income to its sales, indicating the impact of fixed and variable costs.

Contribution Format Income Statement

An income statement that separates fixed and variable costs to highlight the contribution margin.

Operating Leverage

A measure of how sensitive a company's operating income is to a change in its revenues, indicating the proportion of fixed costs in the company's cost structure.

Contribution Format Income Statement

An income statement format that separates fixed costs from variable costs, thus showing the contribution margin.