If USexport Contracts Are Written in Terms of Foreign Currency and and Import

question 24

Multiple Choice

If U.S.export contracts are written in terms of foreign currency and import contracts are denominated in domestic currency,a devaluation of the dollar during the currency contract period

• A)should increase the dollar value of exports.
• B)should not have any effect on the dollar value of U.S. imports.
• C)must increase the BOT.
• D)All of the above

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Definitions:

Gross Profit Method

A technique used to estimate the amount of inventory a business has by applying the gross margin ratio to the cost of goods sold.

Fireproof Vault

A secure storage unit designed to protect contents from fire, typically used to safeguard valuable documents and items.

Grossprofit Ratio

A financial metric that measures the proportion of money left over from revenues after accounting for the cost of goods sold (COGS), expressed as a percentage of sales.

Replacement Cost

The current cost of replacing an asset with a new one of similar style and quality.