Which of the Following Statements Is Incorrect

question 75

Multiple Choice

Which of the following statements is incorrect?

• A)A country cannot be open to international capital flows, control its domestic interest rate and fix its exchange rate
• B)A country can be open to international capital flows and control its own domestic interest rate but it can't fix its exchange rate
• C)A country can be open to international capital flows, control its domestic interest rate, and fix its exchange rate
• D)A country cannot be open to international capital flows if it expects to control its own domestic interest rate and to fix its exchange rate

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Definitions:

Operating Leverage

The degree to which a company uses fixed operating costs, affecting its earnings before interest and taxes (EBIT) with changes in sales.

Breakeven Point

The financial position at which total costs equal total revenues, indicating that there is no net loss or gain.

Fixed Cost

Costs that do not vary with the level of output or sales, such as rent, insurance, and salaries.

Revenue Line

Represents the income that a company generates from its normal business operations, typically shown at the top of an income statement.