A Chinese Company Exchanges Yuan (Chinese Currency)for Dollars

question 64

Multiple Choice

A Chinese company exchanges yuan (Chinese currency) for dollars.It uses these dollars to purchase scrap metal from a U.S.company.As a result of these transactions,Chinese

• A)net exports increase,and U.S.net capital outflow increases.
• B)net exports increase,and U.S.net capital outflow decreases.
• C)net exports decrease,and U.S.net capital outflow increases.
• D)net exports decrease,and U.S.net capital outflow decreases.

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Definitions:

Net Operating Income

The profit a company makes after deducting operating expenses, excluding interest and taxes.

Break-Even

The point at which total costs and total revenues are equal, resulting in neither profit nor loss.

Sales Dollars

The total amount of revenue generated from the sale of goods or services, expressed in monetary units.

Common Fixed Expenses

Costs that do not change with the level of production or sales and are shared across different segments or products of a business.