Consider This Diagram of the Market for Foreign Currency Exchange

question 22

Multiple Choice

Consider this diagram of the market for foreign currency exchange. If the US government decides to increase import tariffs on imported steel, we could expect the

• A) Demand for dollars to shift from D₁ to D₂.
• B) Demand for dollars to shift from D₂ to D₁.
• C) Supply of dollars to increase.
• D) Supply of dollars to decrease.

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Definitions:

Nominal Account

Refers to accounts that track revenues, expenses, gains, and losses; these accounts are closed at the end of each accounting period.

Ledger Accounts

These are individual accounts in accounting that record transactions related to a company's assets, liabilities, equity, revenue, and expenses in a double-entry bookkeeping system.

Net Income

Represents the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenues.

Adjusting Entries

Adjusting Entries are journal entries made in accounting records at the end of an accounting period to update accounts for accruals and deferrals not recorded during the period.