If the Equilibrium Exchange Rate Changes So That Fewer Dollars

question 20

Multiple Choice

If the equilibrium exchange rate changes so that fewer dollars are required to buy a pound, then:

• A)Canadians will buy fewer British goods and services.
• B)the pound has appreciated in value.
• C)fewer Canadian goods and services will be demanded by the British.
• D)the dollar has depreciated in value.

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Definitions:

Reported Income

The earnings of a company as reported in its financial statements, in accordance with the accounting standards.

Book Value

Represents the net value of a company's assets as recorded on the balance sheet, calculated as assets minus liabilities.

Fair Value

The market-based measurement of the value of an asset or liability based on current transactions between willing parties, outside of a forced liquidation or distress sale.

Acquisition Method

An accounting technique used in consolidations that involves recording the assets and liabilities of a company being acquired at their fair value at the date of acquisition.