​Which of the Following Is True of an Exchange Gain

question 20

Multiple Choice

​Which of the following is true of an exchange gain?

• A) ​An exchange gain is a gain on the exchange of one currency for another due to appreciation of the home currency.
• B) ​An exchange gain is a gain on the exchange of one currency for another due to appreciation of the foreign currency.
• C) ​An exchange gain results from the simultaneous currency appreciation of two countries engaging in trade activities.
• D) ​An exchange gain results from the simultaneous currency depreciation of two trading countries engaging in trade activities.

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Definitions:

Average Variable Costs

The cost per unit of producing each good or service, excluding any fixed costs.

Average Total Costs

The total cost of production divided by the quantity of output produced, representing the cost per unit of output.

Total Variable Costs

The total of all costs that vary with the level of output, including expenses such as raw materials, labor, and utilities that increase as production expands.

Average Variable Cost

A firm’s total variable cost divided by output (the quantity of product produced).