In Order to Limit the Effect on Reserves of a Foreign

question 44

Multiple Choice

In order to limit the effect on reserves of a foreign exchange intervention, the Fed engages in _______________

• A)seigniorage.
• B)sterilization.
• C)dollarization.
• D)revaluation.

---

Definitions:

Constructive Receipt

A tax principle stating that income is considered received by the taxpayer once it is credited to their account or made available without restriction.

Taxable Income

The portion of income used to calculate how much the entity owes in taxes to the government, after all deductions and exemptions are applied.

Ability To Pay

The financial capacity of an individual or entity to meet financial obligations or commitments without incurring undue hardship.

Deferred Tax Liabilities

Taxes that are assessed or incurred but not yet paid, typically resulting from timing differences in recognizing revenue and expenses for tax and accounting purposes.