A Devaluation Causes Which of the Following to Occur in the Medium

question 8

Multiple Choice

A devaluation causes which of the following to occur in the medium run?

• A)an increase in net exports
• B)an increase in the price level
• C)an increase in output
• D)all of the above
• E) none of the above

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Definitions:

Net Sales

The top line reported on the income statement. Net sales = Sales revenue − (Credit card discounts + Sales discounts + Sales returns and allowances).

Total Asset Turnover

A metric that evaluates how effectively a company utilizes its assets to produce sales income.

Treasury Stock

Shares that were issued and subsequently reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Fixed Assets

Long-term tangible assets used in the operation of a business that are not intended to be sold within a year, such as buildings, machinery, and equipment.