When a Country Suffers from Capital Flight, the Exchange Rate

question 298

Multiple Choice

When a country suffers from capital flight, the exchange rate

• A)depreciates, because demand in the market for foreign-currency exchange shifts left.
• B)depreciates, because supply in the market for foreign-currency exchange shifts right.
• C)appreciates, because demand in the market for foreign-currency exchange shifts right.
• D)None of the above is correct.

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Definitions:

Net Sales

The revenue from goods or services sold after deducting returns, allowances for damaged or missing goods, and any discounts allowed.

Operating Expenses

Operating expenses are costs associated with running a business day-to-day, excluding costs linked to producing goods and services.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material, labor, and manufacturing overhead costs.

Asset Turnover Ratio

A financial metric that measures the efficiency of a company's use of its assets in generating sales revenue; calculated by dividing sales by total assets.