In Theory, Partially-Flexible Exchange Rates

question 176

Multiple Choice

In theory, partially-flexible exchange rates:

• A)require a very high level of official reserves.
• B)allow speculative pressures to affect exchange rates.
• C)impose no limitations on a country's monetary and fiscal policy.
• D)permit sizable exchange rate fluctuations, as long as they foster movement toward the long-run equilibrium exchange rate.

---

Definitions:

Average Collection Period

The average time it takes for a business to receive payments owed by its customers, indicating the effectiveness of its credit and collection policies.

Balance Sheet

A statement that presents an organization's assets, liabilities, and the equity of its shareholders at a distinct point in time.

Sales On Account

Transactions where goods are sold but payment is deferred to a later date.

Cost Of Goods Sold

The immediate expenses related to the manufacturing of products sold by a business, encompassing costs for both materials and labor.