Drastic Fluctuations in Exchange Rates Are Possible in the Plausible

question 81

Multiple Choice

Drastic fluctuations in exchange rates are possible in the plausible situation of very ________ short-run elasticities of demand for imports and exports,in which a nation's supply curve of its currency to the foreign exchange market can temporarily be ________.

• A)high,downward-sloping
• B)high,upward-sloping
• C)low,downward-sloping
• D)low,upward-sloping

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Definitions:

Net Profit Margin

A financial performance ratio, expressed as a percentage, calculating the amount of net income generated as a portion of revenues.

Unearned Revenue

money received by an entity for a service or product to be delivered or performed in the future.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.

Debt-to-Equity

Debt-to-Equity is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets.