When the Current Rate Method Is Used, the Sign

question 51

Multiple Choice

When the current rate method is used, the sign (+ or -) of the translation adjustment is the result of:

• A) appreciation or depreciation of the foreign currency.
• B) the nature of the balance sheet exposure.
• C) both (A) and (B).
• D) None of the above

---

Definitions:

Marginal Product

The extra production achievable by incorporating an additional unit of a particular input, assuming all other variables remain constant.

Average Product

The output per unit of input, calculated by dividing total output by total input.

Diminishing Marginal Returns

Diminishing Marginal Returns is an economic principle stating that as additional units of a factor of production are added to a fixed amount of other factors, the incremental increase in output will eventually decrease.

Marginal Product

The additional output that results from using one more unit of a specific input, keeping other inputs constant.