A System of Floating Exchange Rates and High Capital Mobility

question 46

Multiple Choice

A system of floating exchange rates and high capital mobility strengthens which policy in combating a recession:

• A) Expansionary fiscal policy
• B) Expansionary monetary policy
• C) Contractionary fiscal policy
• D) Contractionary monetary policy

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Definitions:

Credit Sales

Sales of goods or services that are paid for later, rather than at the time of purchase, building a receivable account on the seller's balance sheet.

Receivables

Amounts due from customers to a company for goods delivered or services rendered, awaiting payment.

Inventory Turnover

A ratio showing how many times a company has sold and replaced inventory over a certain period of time, indicating the efficiency of inventory management.

Financing Costs

Expenses associated with raising capital through debt or equity.