Suppose That in 1999 You Could Purchase About 400 Greek

question 128

Multiple Choice

Suppose that in 1999 you could purchase about 400 Greek drachmas (the former Greek currency,replaced by the euro in 2002) for a dollar.In 2000,you could purchase about 350 drachmas for a dollar.Which statement best explains the changes that could have taken place between 1999 and 2000?

• A) The dollar appreciated,increasing the trade balance.
• B) The dollar depreciated,decreasing the trade balance.
• C) The dollar appreciated,decreasing the trade balance.
• D) The dollar depreciated,increasing the trade balance.

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Definitions:

Incremental Value

The additional value generated by undertaking a specific action or project, compared to not doing so.

Value Per Share

The monetary worth assigned to a single share of stock, based on the company's total valuation divided by the number of outstanding shares.

Equity-Financed

A method of financing in which a company raises capital through the sale of shares, rather than borrowing through debt.

Net Present Value

An evaluation of the profitability of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows over a period.