If US Prices Increase Relative to the Rest of the World

question 165

Multiple Choice

If U.S. prices increase relative to the rest of the world, we would expect:

• A) imports to increase and net exports to increase.
• B) exports to decrease and net exports to decrease.
• C) imports to increase and net exports to increase
• D) exports to decrease and net exports to increase.

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Definitions:

Direct Hours

Hours worked directly on a specific task or product, often used in calculating labor costs in manufacturing.

Direct Materials

Raw materials that can be directly attributed to the production of a specific product or service.

Selling Price

The amount of money a customer pays to purchase a product or service.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products based on a set criteria, like direct labor hours.