Suppose US

question 111

Multiple Choice

Suppose U.S. consumers start buying more English shoes and fewer U.S. shoes. What impact will this trend have on the foreign exchange market?

• A) The U.S. overall demand for foreign exchange, and British pounds, in particular, will increase.
• B) The U.S. overall demand for foreign exchange, and British pounds, in particular, will decrease.
• C) The U.S. demand for British pounds will increase, but the overall demand for foreign exchange will probably decrease.
• D) The U.S. demand for British pounds will decrease, but the overall demand for foreign exchange will probably increase.

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Definitions:

Bonus Shares

Additional shares given to existing shareholders without any extra cost, based on the number of shares they already own.

Basic Earnings

The net income divided by the weighted average number of common shares outstanding during the period, representing earnings per share.

Diluted Earnings

A measure of a company's profitability that accounts for all potential shares that could be exercised or converted into shares, often related to options or warrants.

Accounting Methods

The rules and procedures that a company follows to prepare its financial statements, including various methods for recognizing revenues, expenses, assets, and liabilities.