After a Devaluation, All Other Things Equal, Exports Will Likely

question 372

Multiple Choice

After a devaluation, all other things equal, exports will likely _____ and imports will likely _____.

• A) increase; increase
• B) decrease; decrease
• C) increase; decrease
• D) decrease; increase

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Definitions:

FIFO

First-In, First-Out, an accounting method where the oldest inventory items are recorded as sold first.

ROE

ROE, or Return on Equity, measures a corporation’s profitability by revealing how much profit it generates with the money shareholders have invested.

Investments

The act of allocating resources, usually money, with the expectation of generating an income or profit.

Compound Leverage Factor

A metric used to evaluate the effectiveness of using borrowed funds or financial derivatives to increase investment returns.