2) Each of the following multiple-choice question is worth two points. 2a) During periods of exchange rate volatility, firms dealing in more exchange rate risk that firms sellingproducts. low demand, high demand products.products a. b. low supply, high supply c. undifferentiated, differentiated differentiated, undifferentiated d. 2b) Which of the following operation (domestic) currency? a. s benefit(s) from depreciation of the firm's local borrowing in a foreign country and converting the funds to the local currency prior to the depreciation. purchasing foreign supplies. investing in foreign bank accounts denominated in foreign currencies prior to depreciation of the local currency. b. c. 2c) Generally, multinational companies with less foreign costs than foreign revenues will be affected by a_ foreign currency. a. favorably; stronger b. not; stronger c. favorably; weaker d. not; weaker 2d). A firm produces goods for which substitute goods are produced in all countries. Appreciation of the firm's local currency should: a. decrease local sales as it increases foreign competition in local market I, increase the firm's exports denominated in the local currency. c increase the returns earned on the firm's foreign bank deposits. d. increase the firm's cash outflow required to pay for imported supplies denomin in a foreign currency