Under Managed Floating Exchange Rates, Other Things Equal, a Central

question 96

Multiple Choice

Under managed floating exchange rates, other things equal, a central bank would initiate

• A) a contractionary monetary policy to offset a depreciation of its currency.
• B) a contractionary monetary policy to offset an appreciation of its currency.
• C) an expansionary monetary policy to offset a depreciation of its currency.
• D) None of these are correct.

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Definitions:

Strategic Business Unit

A division or unit within a company that has its own mission, objectives, and competitors, and is managed independently.

Revenue Centre

A segment or area of a business responsible for generating sales and revenue, without direct responsibility for profit or cost.

Investment Centre

A business unit or division within an organization that is responsible for generating its own revenues and managing its own investments and expenses.

Profit Centre

A business unit or department within an organization that is responsible for generating its own revenue and profit.