Under Exchange-Rate Targeting,the Central Bank in the Targeting Country ________

question 38

Multiple Choice

Under exchange-rate targeting,the central bank in the targeting country ________ lose the ability to pursue its own independent monetary policy and any shocks to the anchor country is ________ transmitted to the targeting country.

• A)does;directly
• B)does not;directly
• C)does;not directly
• D)does not;not directly

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Definitions:

Principle of Conservatism

An accounting guideline where revenue and assets are not overestimated while liabilities and expenses are not underestimated.

Gross Margin

The difference between sales revenue and the cost of goods sold, expressed as a percentage of sales revenue.

Normal Profit Margin

The average or expected profit margin that a business aims to achieve under normal operating conditions.

Allowance Method

An accounting technique used to account for expected credit losses on accounts receivable by anticipating uncollectible accounts.