Which of the Following Is Consistent with an Appreciation of the Dollar

question 70

Multiple Choice

Which of the following is consistent with an appreciation of the dollar?

• A)Canadian goods become less expensive relative to foreign goods, which makes exports rise and imports fall.
• B)Canadian goods become less expensive relative to foreign goods, which makes exports fall and imports rise.
• C)Canadian goods become more expensive relative to foreign goods, which makes exports rise and imports fall.
• D)Canadian goods become more expensive relative to foreign goods, which makes exports fall and imports rise.

---

Definitions:

Dividend Irrelevance

Dividend irrelevance theory suggests that the dividend policy a company follows has no effect on the company’s stock price or its cost of capital.

Transaction Costs

Expenses incurred when buying or selling goods and services, which can include commissions, fees, the spread between buy/sell prices, and other related costs.

Floatation Costs

The total costs associated with a company issuing new stocks or bonds, including underwriting, legal, registration, and other expenses.

Dividend Irrelevance Theory

A theory proposed by Modigliani and Miller that suggests dividend policies do not affect a company’s capital structure or stock price in a perfect market.