If the Quantity Supplied of Walkie-Talkies Increases by 5 Percent

question 17

Multiple Choice

If the quantity supplied of walkie-talkies increases by 5 percent when prices increase by 12 percent, then

• A) the supply of walkie-talkies is inelastic.
• B) the supply of walkie-talkies is elastic.
• C) the walkie-talkie supply curve will shift to the right.
• D) the walkie-talkie supply curve will shift to the left.

---

Definitions:

Average Rate

The average rate is a mean exchange rate over a specified period, used for accounting purposes to convert foreign currencies into the functional currency.

Foreign Exchange Gain

A profit resulting from changes in the exchange rate between the base currency and the foreign currency in which a transaction is denominated.

Exchange Loss

A financial loss that occurs when the value of a currency decreases relative to another currency in transactions involving foreign exchange.

Year End

The end of the financial year for a company, marking the close of the reporting period.