Compared to a Situation in Which There Is No Change

question 147

Multiple Choice

Compared to a situation in which there is no change in the value of the dollar relative to the peso,in which of the following situations would you be worse off?

• A)you borrow 10,000 pesos,you earn income in dollars,the dollar appreciates against the peso,you must pay back the loan in pesos
• B)you borrow $10,000,you earn income in pesos,the dollar depreciates against the peso,you must pay back the loan in dollars
• C)you borrow $10,000,you earn income in pesos,the dollar appreciates against the peso,you must pay back the loan in dollars
• D)you borrow 10,000 pesos,you earn income in pesos,the dollar depreciates against the peso,you must pay back the loan in pesos

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Definitions:

Potentially Responsible

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Means Test

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A bankruptcy provision under U.S. law that involves the liquidation of a debtor's assets to pay off creditors.

Chapter 13

A portion of the U.S. Bankruptcy Code permitting individuals earning a steady income to devise a strategy for repaying their debts either in full or in part.