Which of the Following Operations Benefits from Depreciation of the Firm's

question 49

Multiple Choice

Which of the following operations benefits from depreciation of the firm's local currency?

• A) Borrowing in a foreign country and converting the funds to the local currency prior to the depreciation.
• B) Purchasing foreign supplies.
• C) Investing in foreign bank accounts denominated in foreign currencies prior to depreciation of the local currency.
• D) A and B

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Definitions:

Binding Price Ceiling

A government-imposed maximum price that is set below the equilibrium price, resulting in a shortage of the good or service.

Substitute

A good or service that can replace another to satisfy similar needs or desires, often leading to competition between producers.

Consumer Surplus

The divergence between what consumers are willing to pay for a product or service and the actual payment they make.

Supply Curve

A visual display mapping out the link between how much of a good is supplied and its price.