If the US Exchange Rate Decreases Relative to Foreign Currencies, Then

question 130

Multiple Choice

If the U.S. exchange rate decreases relative to foreign currencies, then

• A) imports and exports of the United States will both increase.
• B) imports and exports of the United States will both decrease.
• C) imports of the United States will decrease and exports of the United States will increase.
• D) imports of the United States will increase and exports of the United States will decrease.

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Definitions:

Accrual Accounting

A financial recording approach that documents incomes and expenditures at the time they happen, irrespective of the actual cash flow.

Accrued Revenues

Income that has been earned but not yet received, recorded as an asset on the balance sheet to reflect sales that have taken place.

Liabilities

Financial obligations or debts that a company owes to others, which must be paid back in the future.

Profit Margin

Profit margin is a measure of profitability, calculated as net income divided by revenue, showing the percentage of each dollar of revenue that becomes profit.