Over Time, Which of the Following Will Most Likely Result

question 124

Multiple Choice

Over time, which of the following will most likely result from a depreciation in the exchange rate of the dollar?

• A) Inflation will decline.
• B) Foreign goods will cost Americans less, and therefore, the imports of Americans will rise.
• C) U.S. goods exported abroad will cost less in foreign countries, so foreigners will buy more of them.
• D) U.S. goods exported abroad will cost more in foreign countries, so foreigners will buy fewer of them.

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Definitions:

Net Incomes

The total earnings of a company after deducting all expenses, taxes, and costs from its total revenues.

Deferred Income Tax

Deferred Income Tax is a liability on a company's balance sheet that results from income already earned and recognized for accounting purposes but not yet subject to taxation.

Fair Value

The estimated market price of an asset or liability, reflecting what a willing buyer would pay to a willing seller in an arm's length transaction.

Tax Rate

The proportion of income that is taken as tax from a person or business.