The Ability to Profit by Purchasing Wheat in the U

question 39

Multiple Choice

The ability to profit by purchasing wheat in the U.S.and selling it in China implies that the

• A)nominal exchange rate is less than 1.
• B)nominal exchange rate is greater than 1.
• C)real exchange rate is less than 1.
• D)real exchange rate is greater than 1.

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Definitions:

Investments

Assets or items purchased with the expectation that they will generate income or appreciate in value over time.

Withdraw

The act of taking money out of a business by an owner for personal use or removing oneself from a business arrangement or partnership.

Revenue

Sum total of revenues earned from transactions involving goods or services that are fundamental to a company's main line of business.

Temporary Account

An account used to track transactions within a fiscal period, which is closed and zeroed out at the period's end, moving its balances to permanent accounts.