If a Currency Is Convertible on the Current Account, Which

question 82

Multiple Choice

If a currency is convertible on the current account, which of the following transactions would not be permissible?

• A)the purchase of foreign currency in order to import goods or services
• B)the sale of foreign currency resulting from the export of goods or services
• C)the purchase of foreign currency in order to purchase assets abroad
• D)the sale of foreign currency resulting from the sale of assets abroad

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Definitions:

Fixed Product Cost

Costs associated with production that do not change with the level of output, such as salaries of permanent staff and depreciation of machinery.

Straight Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts.

Net Income

The total profit or earnings after all expenses and taxes have been deducted from revenue.