Which One of the Following Reasons Does NOT Explain Why

question 22

Multiple Choice

Which one of the following reasons does NOT explain why exchange rates are important?

• A) They affect the affordability of imports.
• B) They make exports either more or less expensive for foreign buyers.
• C) They affect the value of foreign assets and their returns.
• D) They affect the profits of all domestic producers.

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Definitions:

Flexible Budget

A budget that is stated as a function of some volume measure, such as units produced. Flexible budgets adjust for changes in volume.

Master Budget

A document that integrates all the estimates from the different departments to establish guidelines and benchmarks for the whole organization.

Favorable Variance

A financial term indicating that actual spending was less than budgeted amounts, or revenue was higher than expected.