A Main Purpose of Exchange Stabilization Funds Is To

question 20

Multiple Choice

A main purpose of exchange stabilization funds is to:

• A) Permit a country to overvalue its currency in the exchange markets
• B) Permit a country to undervalue its currency in the exchange markets
• C) Increase the supply of foreign currency when imports exceed exports
• D) Decrease the supply of foreign currency when imports exceed exports

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Definitions:

Manufacturing Defects

Flaws in a product resulting from the manufacturing process that make it dangerous or unfit for its intended use.

Arbitration

A process for the settlement of disputes whereby an impartial third party or board hears the dispute, then makes a decision that is binding on the parties. Most commonly used to determine grievances arising out of a collective agreement, or in contract disputes.

Automobiles

Motor vehicles with four wheels designed primarily for passenger transportation on public roads.

Caveat Emptor

Latin: “Let the buyer beware.”