There Is Demand for and Supply of Dollars and a Demand

question 65

Multiple Choice

There is demand for and supply of dollars and a demand for and supply of pesos.Under a flexible exchange rate system,if income growth in the United States is greater than income growth in Mexico,then

• A) the demand for dollars will shift to the right and the demand for pesos will shift to the left.
• B) the demand for pesos will shift to the right and the supply of dollars will shift to the left.
• C) the demand for pesos will shift to the left and the supply of pesos will shift to the right.
• D) the supply of pesos will shift to the right and the supply of dollars will shift to the right.
• E) none of the above

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Definitions:

Allowance Method

An accounting technique used to estimate and account for doubtful debts, reducing accounts receivable to a realistic amount.

Direct Method

A way of presenting the cash flow statement where actual cash flows from operating activities are listed directly.

Inventory Loss

A reduction in inventory count due to theft, spoilage, or other discrepancies not related to sales.

Ceiling Constraint

The maximum limit or cap placed on the budget, price, or resources applicable within a project or operation.