When the Price of Foreign Currency (I

question 165

Multiple Choice

When the price of foreign currency (i.e.,the exchange rate) is above the equilibrium level:

• A) An excess supply of that currency exists in the foreign exchange market
• B) An excess demand for that currency exists in the foreign exchange market
• C) The supply of foreign exchange shifts outward to the right
• D) The supply of foreign exchange shifts backward to the left

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Definitions:

Net Realizable Value

The estimated selling price of goods, minus the estimated cost of completion and any costs necessary to make the sale.

Retained Earnings

Profits that a company keeps or retains rather than distributing to shareholders as dividends, often used for reinvestment.

Overstated

The description of financial statements or figures that have been reported at amounts higher than is factual or realistic.

Understated

Understated refers to financial information that is reported at a figure less than the actual value, inadvertently decreasing net income or asset values.