If the Equilibrium Exchange Rate Changes So That It Takes

question 2

Multiple Choice

If the equilibrium exchange rate changes so that it takes more dollars to buy a British pound,then:

• A) the dollar has appreciated in value.
• B) Americans will import more British goods.
• C) the British will buy fewer U.S.goods.
• D) the dollar has depreciated in value.

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Definitions:

Average Daily Receipts

This metric calculates the average amount of money received by a company on a daily basis over a specific period.

Disbursement Float

The time delay between when a check is written and the actual withdrawal of funds from the account.

Book Balance

Refers to the amount of funds on record that a company has in its financial accounts at a specific point in time, not necessarily reflecting pending transactions.

Outstanding Cheques

Cheques that have been written and recorded in the accounting records but have not yet been cashed or cleared through the banking system.