What are exchange rates? How do they affect the global economy?
What will be an ideal response?
Exchange rates are the price of one currency in terms of another. If exchange rates change, so do the prices of exports and imports. Countries whose exchange rates are depreciating will find their exports becoming more price competitive and their imports relatively more expensive. If a seller of products or services expects payment for exports in any denomination other than their home currency, the total home-country receipts will change depending on the exchange rate at the time payment is made. Because exchange rates can give a price advantage to producers, governments seek to manage exchange rates. This is done by using reserves to buy or sell foreign currencies. If reserves are not used, market supply and demand will decide the value of the currency. Countries can choose to devalue their currency purposefully to stimulate their economy's exports and limit imports.
You might also like to view...
Allocated manufacturing overhead is always recorded
A. with a debit to? work-in-process inventory. B. with a credit to manufacturing overhead. C. with a debit to raw materials inventory. D. both A? & B are correct.
The financial statements present aggregated information, for example, the total amount of land, buildings, and equipment. Financial reports provide more detail for some of the items reported in the financial statements, and they provide additional explanatory material to help the user to understand the information in the financial statements. This information appears in _____ that are an integral
part of the financial reports. a. management's discussion and analysis b. external auditors report c. internal auditors report d. press releases e. schedules and notes
Because a firm's performance measures reflect past performance, these measures can NOT be used to assist in forecasting future financial statements
Indicate whether the statement is true or false
A situation in which the management and board of directors of a firm targeted for acquisition disapprove of the merger is called a hostile buyout.
Answer the following statement true (T) or false (F)