If the Fed Announces That It Will Decrease U

question 20

Multiple Choice

If the Fed announces that it will decrease U.S. interest rates, and the European Central Bank takes no action, then the value of the euro will ____ against the value of U.S. dollar (holding other factors constant) .

• A) be unchanged
• B) Depreciate
• C) Appreciate
• D) depreciate but only briefly

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Definitions:

Currently Attainable Standard

This refers to a standard or benchmark that can be achieved under current operating conditions with reasonable efficiency.

Unfavorable Cost Variance

A variance that occurs when the actual cost exceeds the standard cost.

Favorable Cost Variance

A variance that occurs when the actual cost is less than standard cost.

Revenue Price Variance

The difference between the actual revenue received from selling a product and the expected revenue, based on standard pricing.