Under a Fixed Exchange Rate System,a Balance of Payments Surplus

question 45

Multiple Choice

Under a fixed exchange rate system,a balance of payments surplus may:

• A)decrease the country's money supply if there is a non-sterilized central bank intervention.
• B)decrease the country's money supply if there is a sterilized central bank intervention.
• C)increase the country's money supply if there is a non-sterilized central bank intervention.
• D)increase the country's money supply if there is a sterilized central bank intervention.

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Definitions:

Conceptual Framework

A set of fundamental principles and objectives that guides the development of accounting standards and practices.

General Purpose

Aimed to serve a wide range of uses or objectives rather than being specialized for a specific function or task.

Financial Reporting

The method of generating reports that reveal the financial condition of an organization to its management, investors, and governmental bodies.

Legal System

A comprehensive system of rules and principles organized to regulate societal behaviors, enforced through institutions.