Use the Graph Below to Answer Questions 9 - 12

question 14

Multiple Choice

Use the graph below to answer questions 9 - 12.
Figure 1.1
-Refer to Figure 1.1.Suppose that the market for British pound is initially in equilibrium at point A with the exchange rate $2.00 per pound.Then the demand curve shifts to D₂.If the British central bank wants to fix the exchange rate at $2.00/pound,they have to:

• A) buy pound and sell dollar by the amount of Q₃ - Q₁.
• B) sell pound and buy dollar by the amount of Q₃ - Q₁.
• C) sell only pound by the amount of Q₃ - Q₁ and leave dollar alone.
• D) buy only pound by the amount of Q₃ - Q₁ and leave dollar alone.

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Definitions:

Fixed Manufacturing Overhead Volume Variance

The difference between the budgeted and actually applied fixed manufacturing overhead, based on standard costs for a given period.

Fixed Overhead Budget Variance

The difference between actual fixed overhead costs and the budgeted or expected fixed overhead costs.

Volume Variance

A measure of the difference between the budgeted and actual volume of production, impacting costs.

Overhead Variances

The difference between actual overhead costs and the budgeted or standard overhead costs.