An Import-Export Business That Finds Itself in a "Short" Foreign-Currency

question 28

Multiple Choice

An import-export business that finds itself in a "short" foreign-currency position risks a financial loss if:

• A)it pays attention to exchange rate forecasts.
• B)foreign demand for its product rises (more than expected).
• C)the domestic currency depreciates (more than expected)..
• D)the foreign currency depreciates (more than expected)..

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Definitions:

Economic Contraction

Economic contraction is a period of economic decline marked by falling GDP, decreased spending, and increased unemployment.

Private-Owned Enterprises

Businesses that are fully owned by private individuals or corporations, as opposed to being owned by the government or public entities.

Communism

Communism is a political and economic ideology advocating for a classless society, where property and production means are owned and controlled by the community.