Under a Fixed Exchange Rate System,at High Domestic Real Interest

question 47

Multiple Choice

Under a fixed exchange rate system,at high domestic real interest rates net capital outflows are ________,so the central bank ________ foreign-exchange reserves.

• A) positive; acquires
• B) positive; loses
• C) negative; acquires
• D) negative; loses

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Definitions:

Credit Sales

Transactions in which goods or services are provided to a customer with the agreement that payment will be made at a later date.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Credit Sales

Sales of goods or services where the payment is delayed as per agreed terms, instead of requiring immediate payment.

Cash Receipts

Cash receipts are the total amount of money, including cash and checks, received by a business during a specific period from transactions.