If for Some Reason Americans Desired to Increase Their Purchases

question 19

Multiple Choice

If for some reason Americans desired to increase their purchases of foreign assets, then other things the same

• A)both the real exchange rate and the quantity of dollars exchanged in the market for foreign currency would fall.
• B)both the real exchange rate and the quantity of dollars exchanged in the market for foreign currency would rise.
• C)the real exchange rate would rise and the quantity of dollars exchanged in the market for foreign currency would fall.
• D)the real exchange rate would fall and the quantity of dollars exchanged in the market for foreign currency would rise.

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Definitions:

Consolidation

Consolidation refers to the process of combining several smaller entities, debts, or accounts into a single, more comprehensive unit for management efficiency.

Restructuring

The act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable or better organized.

Asset Purchase

An asset purchase involves buying the assets of a company, such as equipment, inventory, and property, rather than buying the company's stock.

Poison Pill

A strategy used by companies to prevent or discourage hostile takeovers by making the company less attractive to the potential acquirer.