If the US Dollar Becomes Stronger in International Foreign Exchange Markets, Imported

question 252

Multiple Choice

If the U.S. dollar becomes stronger in international foreign exchange markets, imported goods become less expensive. One immediate result of this is that

• A) net exports decrease.
• B) net exports increase.
• C) domestic employment rises.
• D) real Gross Domestic Product (GDP) increases.

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Definitions:

Carrying Costs

Expenses associated with holding or storing inventory over a period of time, including insurance, storage, and depreciation.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed in the business within one year or within the normal operating cycle.

Investment

The allocation of resources, such as time, money, or effort, in expectation of future benefits or returns.

Accounts Receivable

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