If Foreign Exchange Rates Are Determined by the Interaction of Supply

question 31

Multiple Choice

If foreign exchange rates are determined by the interaction of supply and demand forces for the various currencies, then the exchange rate is:

• A) fixed.
• B) government-determined.
• C) set by the value of gold.
• D) floating.

---

Definitions:

Direct Labor Budget

A financial plan that estimates the cost of direct labor needed to meet production goals, often detailed by departments or projects.

Production Budget

An estimate of the total units that must be produced in a given period to meet both sales and inventory needs.

Direct Materials Budget

A financial plan that estimates the raw materials needed to meet production targets and the expected costs of those materials.

Materials Per Unit

The quantity of materials required to manufacture a single unit of product, often used in costing and budgeting.