Under a System of Floating Exchange Rates,relatively High Productivity and Low

question 194

Multiple Choice

Under a system of floating exchange rates,relatively high productivity and low inflation rates in the United States result in:

• A) An increase in the demand for foreign currency,a decrease in the supply of foreign currency,and a depreciation in the dollar
• B) An increase in the demand for foreign currency,an increase in the supply of foreign currency,and an appreciation in the dollar
• C) A decrease in the demand for foreign currency,a decrease in the supply of foreign currency,and a depreciation in the dollar
• D) A decrease in the demand for foreign currency,an increase in the supply of foreign currency,and an appreciation in the dollar

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Definitions:

Balance Sheet

A ledger entry detailing a business’s resources, debts, and equity ownership at a fixed point in time.

Adjustment

A modification made to an account or financial statement to correct an error or reflect new information.

Unearned Revenue

Money received by a company for goods or services that have yet to be delivered or provided.

Rental Payments

Periodic payments made by a lessee to a lessor for the use of a property, equipment, or other asset.