If the USRaised Its Tariff on Tires,then at the Original Exchange Rate

question 79

Multiple Choice

If the U.S.raised its tariff on tires,then at the original exchange rate there would be a

• A)surplus in the market for foreign-currency exchange,so the real exchange rate would appreciate.
• B)surplus in the market for foreign-currency exchange,so the real exchange rate would depreciate.
• C)shortage in the market for foreign-currency exchange,so the real exchange rate would appreciate.
• D)shortage in the market for foreign-currency exchange,so the real exchange rate would depreciate.

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Definitions:

Purchase Discounts

Reductions in price given by suppliers for early payment or bulk purchasing.

Controlling Account

A general ledger account that summarizes the total balances of several subsidiary accounts.

Accounts Payable

Liabilities to suppliers or creditors for items or services purchased on credit.

Merchandise Inventory

The total cost of all the goods owned by a company that are intended for sale, during a particular accounting period.