A Devaluation of the Home Currency

question 61

Multiple Choice

A devaluation of the home currency

• A) makes foreign goods and services cheaper relative to those sold at home.
• B) makes domestic goods and services more expensive relative to those sold abroad.
• C) decreases demand and output.
• D) increases demand for domestic goods and services.
• E) increases output and makes domestic goods and services cheaper relative to those sold abroad.

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Definitions:

Closing Entry

Entries recorded at the conclusion of an accounting period for the purpose of shifting balances from temporary accounts to permanent ones.

Balance Sheet Account

An account displayed on the balance sheet, which includes assets, liabilities, and equity accounts, representing a snapshot of a company's financial position at a specific point in time.

Accounting Cycle

The collective process of recording and processing the accounting events of a company, from the initial transaction to the preparation of financial statements.

Journalizing Transactions

The act of recording business transactions into accounting records in chronological order.