Every Transaction Concerning the Exportation of Goods from the United

question 117

Multiple Choice

Every transaction concerning the exportation of goods from the United States constitutes a

• A) supply of foreign currency with no effect on the market for the dollar.
• B) demand for dollars with no effect on markets for foreign currencies.
• C) supply of foreign currencies and a demand for dollars.
• D) demand for foreign currencies and a supply of dollars.

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Definitions:

Financial Asset

An asset that derives value from a contractual claim, such as cash, ownership interest in an enterprise, a bond, stock, or right to receive cash from a contract.

Accounts Receivable

Money owed by customers to a company for goods or services that have been delivered or used but not yet paid for.

Forward Exchange Contracts

Financial derivatives that lock in an exchange rate today for the purchase or sale of a currency on a future date.

Financial Instruments

Deals that create a financial asset for one entity and simultaneously generate either a financial liability or an equity instrument for another entity.