If the Fed Wants to Increase the Value of the Dollar

question 12

Multiple Choice

If the Fed wants to increase the value of the dollar, it will

• A)sell foreign securities and buy dollars in international currency markets.
• B)buy foreign securities and sell dollars in international currency markets.
• C)buy foreign securities and also buy dollars in international currency markets.
• D)sell foreign securities and also sell dollars in international currency markets.

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Definitions:

Operating Profit

Earnings before interest and taxes (EBIT), representing the profit a company makes from its operations after subtracting operating expenses from revenue.

Sales Mix

The proportion of different products or services that make up the total sales of a company.

Unit Contribution Margin

The amount each unit sold contributes to covering fixed costs and generating profit, calculated by subtracting variable costs per unit from the selling price per unit.

Break-Even Point

The financial point at which total revenues equal total costs and expenses, resulting in no net loss or gain.