If the Dollar Appreciates in Value Relative to Foreign Currencies

question 171

Multiple Choice

If the dollar appreciates in value relative to foreign currencies,

• A) planned aggregate expenditure decreases.
• B) planned aggregate expenditure increases.
• C) the quantity of real domestic output demanded increases.
• D) the quantity of real domestic output demanded decreases.
• E) planned aggregate expenditure is unaffected.

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Definitions:

Plantwide Predetermined Rate

A single overhead absorption rate calculated for an entire manufacturing facility to allocate overhead costs to products.

Markup

refers to the amount added to the cost price of goods to cover overhead and profit.

Machine-Hours

A measure of production volume based on the total hours machines are run in the manufacturing process, often used to allocate overhead costs.

Departmental Predetermined Rates

The estimated overhead rates calculated for specific departments within a company to allocate costs appropriately.