Which of the Following Is a Characteristic of a Currency

question 21

Multiple Choice

Which of the following is a characteristic of a currency board?

• A)A currency board focuses on maintaining a floating exchange-rate.
• B)A currency board issues domestic currency liabilities only in exchange for foreign currency assets.
• C)A currency board frequently carries out sterilized intervention in order to maintain the fixed rate.
• D)A currency board insulates the country from adverse foreign shocks by prescribing effective fiscal and regulatory policies.

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Definitions:

Null Hypothesis

A hypothesis that assumes no statistical significance exists in a set of observations and that any observed difference is due to sampling or experimental error.

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true, often denoted as alpha and used as a threshold for determining statistical significance.

Null Hypotheses

A statistical hypothesis that assumes no significant difference or effect exists within a set of given observations.

Type I Error

The error that occurs when a null hypothesis is incorrectly rejected when it is actually true, often referred to as a "false positive."