A Problem with Currency Boards Is That the Central Bank

question 52

Multiple Choice

A problem with currency boards is that the central bank loses:

• A) control over the government budget.
• B) a flexible exchange rate is always preferred to a pegged exchange rate.
• C) influence over interest rates.
• D) the ability to supervise banks.

---

Definitions:

Standard Direct Labour Rate

The pre-established amount paid per unit of work or hour of labor to employees directly involved in manufacturing.

Materials Price Variance

A financial metric measuring the deviation between the budgeted or standard cost of materials and the actual cost incurred.

Variable Manufacturing Overhead Cost Incurred

The total variable costs that have been spent during a particular period for activities related to manufacturing overhead.

Total Variable Overhead Variance

The difference between the actual variable overhead cost incurred and the expected variable overhead cost estimated in the budget.