If the Equilibrium Exchange Rate Changes So That Fewer Dollars

question 20

Multiple Choice

If the equilibrium exchange rate changes so that fewer dollars are required to buy a pound, then:

• A)Canadians will buy fewer British goods and services.
• B)the pound has appreciated in value.
• C)fewer Canadian goods and services will be demanded by the British.
• D)the dollar has depreciated in value.

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Definitions:

Investment

The allocation of resources, such as time, money, or effort, in the expectation of generating a future benefit or profit.

Equity Carrying Amount

The net amount at which an asset or liability is reported in the balance sheet, often referring to the value of an investment in another entity after adjustments.

Net Assets

The total assets of an entity minus its total liabilities, representing the owner's or shareholder's equity in the entity.

AASB 128

The Australian Accounting Standards Board standard related to the accounting for investments in associates and to set out the application of the equity method when accounting for investments in associates and joint ventures.