If Goods in Canada Cost the Same Number of Dollars

question 85

Multiple Choice

If goods in Canada cost the same number of dollars as German goods cost in euros, the real exchange rate would be computed as how many German goods per Canadian goods?

• A) one
• B) the price of the Canadian goods
• C) the amount of German currency that can be bought with one unit of Canadian currency
• D) the amount of Canadian currency that can be bought with one unit of German currency

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Definitions:

Depreciation Expense

An accounting method used to allocate the cost of a tangible asset over its useful life.

Machine Hours

A measure of the operating time of a machine, used in costing and budgeting to allocate expenses based on usage.

Units-Of-Production

A depreciation method that allocates the cost of an asset over its useful life based on the number of units it produces.

Depreciable Cost

The initial cost of an asset minus its salvage value, which is the amount that can be depreciated over the life of the asset.