Policy Makers Can Select from a Number of Different Exchange

question 1

Multiple Choice

Policy makers can select from a number of different exchange rate regimes and exchange rate policies. Which of the following policies would most likely represent a hard peg?

• A) Revaluation.
• B) Devaluation.
• C) Dollarisation.
• D) Flexible exchange rates.
• E) Crawling peg.

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Definitions:

Income Summary

An account in the general ledger used to transfer the balances of temporary accounts to permanent accounts at the end of an accounting period.

Capital

Financial assets or the financial value of assets, such as cash and goods, used by a business to generate income or wealth.

Net Loss

The amount by which expenses exceed revenues over a specific period, indicating that a company has spent more than it has earned.

Income Summary Account

The income summary account is a temporary account used during the closing process to summarize the period's revenues and expenses before transferring the net income or loss to the owner's equity account.