Because of the Emissions Testing Scandal at Volkswagen,Australians Develop an Aversion

question 26

Multiple Choice

Because of the emissions testing scandal at Volkswagen,Australians develop an aversion to German cars relative to cars manufactured in Australia.This will,ceteris paribus,

• A) decrease the demand for German cars relative to Australian cars, decrease the demand for the euro, and cause the euro depreciate against the dollar.
• B) increase the demand for German cars relative to Australian cars, increase the demand for the euro, and cause the euro appreciate against the dollar.
• C) decrease the demand for German cars relative to Australian cars, decrease the demand for the euro, and cause the euro appreciate against the dollar.
• D) increase the demand for German cars relative to Australian cars, decrease the demand for the euro, and cause the euro depreciate against the dollar.

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Definitions:

Discontinued Operations

Components of a business, such as divisions or subsidiaries, that have been sold or otherwise disposed of, or are held for sale.

Selling and Administrative Expenses

Combined costs associated with the selling of products or services and the management of the company.

Liquidity

The ease with which an asset can be converted into cash without affecting its market price.

Profitability

Refers to a company's ability to generate income relative to its revenue, operating costs, and other expenses over a certain period.