The Firm May Not Be Able to Pass Through Changes

question 6

Multiple Choice

The firm may not be able to pass through changes in the exchange rate

• A)in markets with mainly domestics (foreign to the firm) competitors.
• B)in markets with low price elasticities.
• C)both a and b
• D)none of the above

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Definitions:

Adjusted Basis

The original cost of property plus any improvements, or minus depreciation or losses, used to calculate capital gains or losses for tax purposes.

FMV

Fair Market Value, the price at which property would sell between a willing buyer and seller in an arm's length transaction.

Gift Tax

A federal tax on the transfer of property by gift from one individual to another with the donor being primarily responsible for paying the tax.

FMV

Fair Market Value, an estimation of the market value of a property or asset, based on what a knowledgeable, willing, and unpressured buyer would likely pay to a knowledgeable, willing, and unpressured seller in the market.