A Negative Balance in the Capital and Financial Account Means

question 61

Multiple Choice

A negative balance in the capital and financial account means the economy is

• A) lending to the rest of the world.
• B) running a capital account surplus.
• C) borrowing from the rest of the world.
• D) importing more than it is exporting.

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Definitions:

Fixed Manufacturing Overhead

Represents the indirect costs associated with manufacturing that do not vary with the level of production, such as factory rent, salaries of factory supervisors, and depreciation of factory equipment.

Machine-Hours

A unit of measure representing the operating time of machines used in the production of goods.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate manufacturing overhead costs to products based on a specific activity base.

Manufacturing Overhead

Indirect costs related to manufacturing, such as utilities, maintenance, and salaries for managers, not directly involved in production.