An Increase in the Budget Deficit Causes Net Capital Outflow

question 56

Multiple Choice

An increase in the budget deficit causes net capital outflow to

• A)rise,because the supply of loanable funds shifts right.
• B)rise,because the demand for loanable funds shifts right.
• C)fall,because the supply of loanable funds shifts left.
• D)fall,because the demand for loanable funds shifts right.

Understand the role of incremental revenue in evaluating various courses of action.

Differentiate between relevant and avoidable costs.

Learn the principles guiding make or buy, and special order decisions.

Acknowledge the concept of sales mix and its impact on business strategy.

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Definitions:

Ambush

A surprise attack by people lying in wait in a concealed position.

Positive Feedback Loop

A process that occurs in a system where the output enhances or amplifies the initial condition, leading to an increase in the effect.

Co-operation

The process of groups or entities working together towards a common goal, often leading to mutual benefit or success.

Mutualism

A type of symbiotic relationship between two species in which both benefit from the interaction, contributing to their survival and success.