Other Things Equal, Under a Floating Exchange Rate System, If

question 149

Multiple Choice

Other things equal, under a floating exchange rate system, if American exports decrease and American imports increase, the value of the dollar will likely

• A) appreciate.
• B) depreciate.
• C) be officially revalued.
• D) be officially devalued.

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Definitions:

Raw Materials

The basic materials and substances used in the initial stages of production to manufacture goods.

Standard Costs

Predicted costs associated with manufacturing or providing a service, used for budgetary control and performance analysis.

Cash Account

An account that tracks the flow of cash transactions, including all receipts and payments of cash.

Standard Cost Variances

Differences between the planned (standard) costs and the actual costs incurred.