Which Item Is NOT a Determinant of the Demand for Foreign

question 85

Multiple Choice

Which item is NOT a determinant of the demand for foreign currency?

• A) a desire for foreign goods and services
• B) income
• C) the exchange rate
• D) inflation

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Definitions:

Accounting Equation

The fundamental principle of accounting that states Assets = Liabilities + Equity, which must always be in balance for accurate financial reporting.

Net Income

Net income is the total profit of a company after all expenses, including taxes and operational costs, are subtracted from its total revenue.

Total Liabilities

The sum of all financial obligations a company has to external parties, including both short-term and long-term debts.

Accounting Equation

The fundamental formula in accounting that states assets equal liabilities plus equity (Assets = Liabilities + Equity).