In the Foreign Exchange Market, the Supply Curve for Dollars

question 175

Multiple Choice

In the foreign exchange market, the supply curve for dollars slopes upwards because

• A) as the exchange rate rises, imports become more expensive, and more dollars are supplied to pay for the imports.
• B) as the exchange rate rises, imports become cheaper, and more dollars are supplied to pay for the increase in the quantity of imports.
• C) as the exchange rate rises, more dollars are supplied since the profit from selling dollars falls.
• D) supply curves always slope upwards.

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Definitions:

Unrealized Increase

The increase in value of an asset that has not yet been sold or disposed of. It represents potential profit, but it is not reflected in the financial statements until the gain is realized.

APB Opinion No. 22

Guidance issued by the Accounting Principles Board on the disclosure of accounting policies, requiring firms to include a summary of significant accounting policies in their financial statements.

Subsequent Event

An event that occurs after the balance sheet date but before the financial statements are issued, which may affect the company's financial position or performance.

Financial Disclosure Requirements

Regulations and standards mandating companies to disclose certain financial and operational information, ensuring transparency and aiding stakeholders in informed decision-making.