When the Exchange Rate Between Pounds and Dollars Moves from $2

question 165

Multiple Choice

When the exchange rate between pounds and dollars moves from $2 = 1 pound to $1 = 1 pound, we say that the dollar has

• A)depreciated.
• B)appreciated.
• C)inflated.
• D)deflated.

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Definitions:

Advertising Expense

Costs incurred in promoting products or services, classified under operating expenses in the income statement.

Period Cost

Expenses that are not directly tied to the production of goods or services, such as sales, administrative, and other operating expenses.

Product Cost

The total expense incurred to manufacture or acquire a product, including direct materials, labor, and overhead costs.

Depreciation

An accounting method of allocating the cost of a tangible or physical asset over its useful life, representing the asset's wear and tear over time.