Which of the Following Companies Would Gain from Foreign Currency

question 115

Multiple Choice

Which of the following companies would gain from foreign currency depreciation?

• A)companies which borrow in foreign currency.
• B)companies which export goods and services.
• C)companies which invest in the foreign equity markets.
• D)companies which buy bonds issued by the foreign government.

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Definitions:

Government Spending

The total amount of money that the government expends on various projects, services, and activities to operate and provide for its citizens.

Interest Rates

The cost of borrowing money expressed as a percentage of the loan amount, typically noted on an annual basis.

Business Investment

The allocation of resources by businesses into areas with the expectation of earning future returns, such as buying new equipment or expanding operations.

Consumer Durable Expenditures

Spending by consumers on long-lasting goods (durables) such as cars, appliances, and furniture that are expected to be used for several years.