Under a Floating Exchange Rate,the Exchange Rate

question 36

Multiple Choice

Under a floating exchange rate,the exchange rate

• A)will change whenever the price of gold changes.
• B)is controlled by central bank intervention.
• C)is determined by the interaction of supply of the currency and demand for the currency.
• D)is pegged against the euro.

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Definitions:

Variable Selling

Costs that vary directly with the level of sales activity, such as commissions or shipping charges.

Administrative Expense

Expenses related to the general operation of a business, such as office supplies, management salaries, and utilities.

Fixed Selling

Costs that remain constant regardless of the volume of goods or services sold.

Direct Labor-Hours

The total hours worked by employees that are directly involved in the manufacturing process.