If a US Firm's Sales in Australia Are Much Greater Than Its

question 92

Multiple Choice

If a U.S. firm's sales in Australia are much greater than its cost of goods sold in Australia, the appreciation of the Australian dollar has a ____ impact on the firm's ____.

• A) positive; interest expenses
• B) positive; gross profit
• C) negative; interest expenses
• D) negative; gross profit

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Definitions:

Production Possibility

A graph showing the highest possible production levels of two items, using a specific combination of resources and various factors.

Opportunity Costs

Making a choice results in the loss of potential profit that could have been earned from choosing differently.

Increasing Opportunity

In economic terms, refers to the increasing cost associated with producing additional units of a good, implying that producing more of one good requires sacrificing increasingly larger amounts of another good.

Production Possibilities

The various combinations of goods and services that can be produced by an economy given its available resources and technology, illustrating potential trade-offs and efficiency.