Ceteris Paribus,if Incomes Increase Faster in the United States Than

question 15

Multiple Choice

Ceteris paribus,if incomes increase faster in the United States than in less developed countries,then the currencies of less developed countries should

• A)Appreciate,and the dollar should appreciate.
• B)Appreciate,and the dollar should depreciate.
• C)Depreciate,and the dollar should appreciate.
• D)Depreciate,and the dollar should depreciate.

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Definitions:

Incremental Net Cash

The difference in net cash flows between two alternatives, emphasizing the additional cash brought in by a certain decision.

Tax Rate

The percentage at which an individual or corporation is taxed.

Incremental Net Income

The increase in net income resulting from a particular business decision or activity, compared to what it would have been without that decision or activity.

Immediate Cash Outflows

Expenses or payments that must be made in cash immediately or within a very short time frame.