Which of the Following Is Not a Disadvantage of Exchange-Rate

question 129

Multiple Choice

Which of the following is not a disadvantage of exchange-rate targeting?

• A) It relies on a stable money-inflation relationship.
• B) The targeting country gives up an independent monetary policy.
• C) The targeting country is left open for a speculative attack.
• D) It can weaken the accountability of policymakers.

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Definitions:

Assets

Economic resources or items of value owned by an individual or organization, including tangible and intangible resources, that can be used to produce positive economic value.

Liquidity

The ease with which an asset or security can be converted into ready cash without affecting its market price.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a basis for computing rates of return and evaluating its capital structure.

Current Ratio

A financial ratio indicating how well a firm can cover its short-term liabilities with its present assets.