Under Adjustable Pegged Exchange Rates,if the Rate of Inflation in the United

question 115

Multiple Choice

Under adjustable pegged exchange rates,if the rate of inflation in the United States exceeds the rate of inflation of its trading partners:

• A) U.S.exports tend to rise and imports tend to fall
• B) U.S.imports tend to rise and exports tend to fall
• C) U.S.foreign exchange reserves tend to rise
• D) U.S.foreign exchange reserves remain constant

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Definitions:

Consolidated Income Statement

A financial document that summarizes the combined income and expenses of a parent company and its subsidiaries.

Sales

The revenue a company generates from selling goods or services.

Consolidated Balance Sheet

A financial statement presenting the total assets, liabilities, and shareholders' equity of a parent company and its subsidiaries as one entity.

Patents

Exclusive rights granted to an inventor to manufacture, use, or sell an invention for a certain number of years.