In Macroland,potential GDP Equals $500 Billion and Real GDP Equals

question 28

Multiple Choice

In Macroland,potential GDP equals $500 billion and real GDP equals $560 billion.Macroland has a(n) _________ gap equal to ________% of potential GDP.

• A) expansionary;12
• B) expansionary;11
• C) expansionary;60
• D) recessionary;12
• E) recessionary;11

Identify and analyze the use of forward contracts and options in hedging foreign exchange risk.

Determine the accounting treatment for forward contracts and currency options under U.S. GAAP.

Analyze the effect of exchange rate changes on foreign currency denominated transactions and hedging activities.

Understand the definitions and applications of spot rates, forward rates, and the calculation of gains or losses on foreign exchange.