The Following Figure Shows the Equilibrium in the Foreign Exchange

question 119

Multiple Choice

The following figure shows the equilibrium in the foreign exchange market where dollars are exchanged for yuan.

-Refer to the figure above.If the yuan is allowed to float,at exchange rates above E yuan per dollar,________ the value of the dollar in the foreign exchange market.

• A) the excess demand for dollars in exchange for yuan increases
• B) the excess demand for dollars in exchange for yuan lowers
• C) the excess supply of dollars in exchange for yuan increases
• D) the excess supply of dollars in exchange for yuan lowers

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Definitions:

Variable Manufacturing Overhead

Costs that fluctuate with production volume, such as indirect materials and utilities for machinery.

Variable Overhead Efficiency Variance

A measure used to assess the efficiency of variable overhead resource usage, calculated as the difference between actual and expected costs based on standard usage rates.

Direct Materials Purchases Variance

The difference between the actual cost of materials purchased and the expected cost at standard prices.

Direct Labor-Hours

An alternative term for direct labor-hour, referring to the labor time spent by employees directly on manufacturing a product.