Suppose the Exchange Rate in the Year 2010 Was 4

question 150

Multiple Choice

Suppose the exchange rate in the year 2010 was 4 yuan per dollar and in 2011 the exchange rate fell to 3 yuan per dollar.If the price of a Chinese sweater was 120 yuan in both years,the new dollar price in 2011 would be ________ and imports of Chinese sweaters would ________.

• A)$40;increase
• B)$30;decrease
• C)$40;decrease
• D)$30;increase
• E)$40;stay the same because the price stayed the same at 120 yuan

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Definitions:

Horizontal Analysis

An analytical approach to finance, examining historical financial records from several periods to spot growth trends and patterns.

Vertical Analysis

A technique for examining financial statements by presenting each item in the main categories of accounts (assets, liabilities, and equity) on a balance sheet as a fraction of the overall category.

Balance Sheet Data

Information related to the assets, liabilities, and stockholders' equity of a company as presented in its balance sheet at a specific date.

Current Ratio

An indicator of a business's capability to cover its obligations due in less than a year, determined by dividing the total of current assets by the total of current liabilities.