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:

Net Income

The total profit of a company after all expenses, including taxes and interest, have been deducted from total revenue.

Dividend Payout Ratio

The percentage of earnings paid to shareholders in the form of dividends, calculated by dividing total dividends by net income.

Earnings Per Share

A financial metric that measures a company's profitability by dividing its net income by the number of outstanding shares of its common stock.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted; it contributes towards covering fixed costs and generating profit.