The Figure Given Below Depicts the Foreign Exchange Market for British

question 121

Multiple Choice

The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2

-Under a fixed exchange-rate system, in order to maintain the exchange rate:

• A)governments must adopt a laissez-faire economic policy.
• B)all trading partners must enjoy the same level of economic growth.
• C)currencies must be inconvertible.
• D)the imports of one country must equal the exports of its trading partner.
• E)governments must intervene in the foreign exchange market.

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Definitions:

Cash Deficiency

A situation where the cash available is not sufficient to cover the expenses or liabilities; often results in the need for additional financing or budget adjustments.

Production Budget

A plan that outlines the number of units that must be produced within a period to meet the expected sales and inventory levels.

Units Produced

Units produced quantify the number of complete units manufactured or produced during a specific time frame in a production process.

Budget

An accounting device used to plan and control resources of operational departments and divisions.