Which of the Following Statements Is Most Accurate

question 99

Multiple Choice

Which of the following statements is most accurate?

• A) A revaluation restores internal and external balance immediately, without causing domestic inflation.
• B) A devaluation restores internal and external balance immediately, without causing domestic inflation.
• C) A revaluation restores internal and external balance immediately, but also causes domestic inflation.
• D) A devaluation restores internal and external balance immediately, but also causes domestic inflation.
• E) A devaluation restores external balance in the long run, without causing immediate domestic inflation.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales over a short period, such as rent or salaries.

Operating Cash Flow

The cash generated from the normal operating activities of a business within a specific time period.

Net Present Value

Net present value is the difference between the present value of cash inflows and the present value of cash outflows over a period of time, used in capital budgeting to assess the profitability of an investment.

Fixed Costs

Overheads that do not vary with production or sales volumes, encompassing rental fees, salary payments, and premiums for insurance.