Degree of operating leverage is best described as a measure of the sensitivity of:
a. net earnings to changes in sales.
b. fixed operating costs to changes in variable costs.
c. operating earnings to changes in the number of units produced and sold.
Ans: c. operating earnings to changes in the number of units produced and sold.
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Which of the following can be perceived from measuring actual individual consumption across global markets?
A) Developed countries are likely to benefit more from full integration than developing countries. B) Purchasing power differences do not account for differences in demand of products and services. C) The living standards of high-income countries differ from low-income countries. D) A vast majority of the world's income is concentrated in the lower-middle or upper-middle income countries.
Which of the following is a characteristic of countries in a free trade area?
A) abolition of internal tariffs and quotas B) establishment of common external barriers C) removal of restriction on factor movements D) harmonization of economic, social, and regulatory policies