Suppose, Due to Political Instability, Russians Suddenly Choose to Purchase

question 16

Multiple Choice

Suppose, due to political instability, Russians suddenly choose to purchase UK assets as opposed to Russian assets. Which of the following statements is true regarding the value of the pound and UK net exports? The pound:

• A) Appreciates, and UK net exports rise.
• B) Appreciates, and UK net exports fall.
• C) Depreciates, and UK net exports rise.
• D) Depreciates, and UK net exports fall.

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Definitions:

Fair Value Concept

An accounting principle that assesses assets and liabilities at their current market value rather than their historical cost.

Impairment Tests

Assessments carried out to determine whether an asset's carrying value exceeds its recoverable amount, indicating a need for value adjustment.

IFRS

International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board (IASB) that guide the preparation of financial statements globally.

GAAP

Generally Accepted Accounting Principles are the set of rules, standards, and practices formally accepted as guidelines for financial reporting in the U.S.