An Institution That Issues a Currency at a Fixed Rate

question 18

Multiple Choice

An institution that issues a currency at a fixed rate in exchange for an equivalent amount of another designated currency and invests the funds in bonds and liquid assets that provide 100 percent backing for the currency units issued is called

• A) a central bank.
• B) the International Monetary Fund.
• C) the World Trade Organization.
• D) a currency board.

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Definitions:

Variable Expense Ratio

A financial metric that measures variable costs as a percentage of sales, reflecting how those costs fluctuate with production output.

Operating Leverage

A measure of how sensitive a company's operating income is to a change in sales volume, indicating the level of fixed costs in the business structure.

Sales Commissions

Payments made to sales personnel based on sales volume or value, serving as an incentive for increased sales performance.

Marketing Manager

A professional responsible for developing, implementing, and executing marketing plans for an organization or product, aiming to attract potential customers and retain existing ones.