Suppose That Argentina's Dollar-Denominated External Assets and Liabilities Are $10

question 104

Multiple Choice

Suppose that Argentina's dollar-denominated external assets and liabilities are $10 billion and $100 billion, respectively, and its Argentine peso-denominated external assets and liabilities are each 50 billion pesos (P) . Suppose further that Argentina fixes its exchange rate at P1 = $US1. What is the peso value of Argentina's total external wealth?

• A) -60 billion pesos
• B) -150 billion pesos
• C) -0 billion pesos
• D) -90 billion pesos

---

Definitions:

Recognized

In accounting, recognized refers to the formal acknowledgment of a financial transaction or event in the financial statements of a business.

Adjusting Entry

At the close of an accounting period, entries recorded in the financial ledgers to distribute incomes and costs to the period they genuinely happened.

Expense

Outflows or the using up of assets or incurrences of liabilities during a period from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity’s ongoing major operations.

Bill Received

An invoice or statement listing goods provided or services rendered, indicating the amount due for payment.