For a Firm That Competes Internationally to Sell Its Products

question 40

Multiple Choice

For a firm that competes internationally to sell its products, a depreciation of its domestic currency relative to markets where the firm exports goods, should eventually result in ________ sales at home and ________ sales abroad, other things equal.

• A) fewer; greater
• B) fewer; fewer
• C) greater; greater
• D) greater; fewer

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Definitions:

Noncash Investing

Involves transactions that do not directly involve cash but affect the investing activities of a company; for example, acquiring assets through a trade or a note.

Financing Activity

Transactions related to a company’s financing efforts, including issuing debt, obtaining loans, or issuing shares of stock.

Cash Equivalent

Short-term, highly liquid investments that can be easily converted to a known amount of cash.

Liquid Asset

Assets that can be quickly and easily converted into cash without significant loss in value.