Figure 29-1 -Refer to Figure 29-1. Suppose That the U.S. Government Deficit

question 234

Multiple Choice

Figure 29-1
-Refer to Figure 29-1. Suppose that the U.S. government deficit causes interest rates in the United States to rise relative to those in the European Union. Assuming all else remains constant, how would this be represented?

• A) Supply would decrease, demand would decrease and the economy moves from B to C to D.
• B) Supply would increase, demand would decrease and the economy moves from C to B to A.
• C) Supply would decrease, demand would increase and the economy moves from A to D to C.
• D) Supply would increase, demand would increase and the economy moves from D to A to B.

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Definitions:

LIFO Retail Inventory Method

An inventory costing method that assumes the last items placed in inventory are sold first, not necessarily reflecting the actual physical flow of merchandise.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated as the beginning inventory plus purchases minus cost of goods sold.

Net Markups

The difference between the cost of a good or service and its selling price, after accounting for discounts, allowances, or returns.

Net Markdowns

The reduction in the original selling price of merchandise minus any markdown cancellations.