All Else Being Equal, If European Firms Switch from U

question 144

Multiple Choice

All else being equal, if European firms switch from U.S. produced software to software produced in India, the equilibrium value of the U.S. dollar will:

• A)rise.
• B)fall.
• C)become fixed.
• D)either rise or fall depending on whether the supply or demand for dollars changes more.

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Definitions:

Outstanding Shares

The total number of shares of stock that are currently owned by shareholders, including both public investors and restricted insiders.

Fixed Assets

Long-term tangible assets that are used in the operations of a business and are not expected to be consumed or converted into cash in the near term.

Net Present Value

The disparity in present values of cash inflows versus cash outflows within a certain time span.

Equity Shares

Represent ownership shares in a company, giving shareholders voting rights and a claim on company profits in the form of dividends.