The Effect on Revenues and Expenses from Variations in the Value

question 82

Multiple Choice

The effect on revenues and expenses from variations in the value of the U.S.dollar in terms of other currencies is called:

• A)interest rate risk
• B)exchange rate risk
• C)purchasing power risk
• D)financial risk
• E)none of the above

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Definitions:

Market Price

The price of a commodity when sold in a competitive marketplace, determined by the supply and demand for the commodity.

Profit

The financial gain realized when the revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain the business.

Short-Run

A period in which at least one factor of production is considered fixed, affecting the ability of businesses to change production levels.

Marginal Cost Curve

A graphical representation showing how the cost of producing one more unit of a good varies with the level of production.