If a Country Adopts a Currency Board Arrangement, a Result

question 20

Multiple Choice

If a country adopts a currency board arrangement, a result is that the country's money supply __________ be increased by the purchase of domestic assets from the country's citizens by the country's central bank; in this arrangement, the country's money supply __________ be increased by the purchase of foreign assets from the country's citizens by the country's central bank.

• A) can; also can
• B) can; cannot
• C) cannot; can
• D) cannot; also cannot

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Definitions:

Capitalism

An economic system characterized by private or corporate ownership of capital goods, investments determined by private decision, and prices, production, and the distribution of goods that are determined mainly by competition in a free market.

Growth of the State

The process of increase in the size and scope of government activities, often referring to the expansion of its regulatory, taxing, and coercive capacities.

Industrial Societies

Are societies that use machines and fuel to greatly increase the supply and dependability of food and finished goods. The first such society emerged in Great Britain in the last decades of the eighteenth century.

Social Control

Mechanisms, strategies, and institutions by which societies attempt to regulate individual behavior to maintain societal order and cohesion.