An Exchange Rate That Varies According to Supply and Demand

question 64

Multiple Choice

An exchange rate that varies according to supply and demand for the currency in the foreign exchange market is called a ________ exchange rate.

• A)real
• B)nominal
• C)fixed
• D)flexible

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Definitions:

Operating Income

The profit realized from a business's normal operations, calculated by subtracting operating expenses from gross profit.

Sales

The total amount of a company's revenues generated from goods or services provided to customers.

Divisional Operating Income

The profit generated from a specific division of a company, excluding expenses and incomes not directly related to the division's operations.

Proportional Allocation

A method of distributing costs or revenues among different departments, products, or activities in proportion to some base measure such as hours worked or units produced.