Which of the Following Is NOT a Disadvantage of Exchange-Rate

question 88

Multiple Choice

Which of the following is NOT a disadvantage of exchange-rate targeting?

• A)It relies on a stable money-inflation relationship.
• B)The targeting country gives up an independent monetary policy.
• C)The targeting country is left open for a speculative attack.
• D)It can weaken the accountability of policymakers.

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Definitions:

Exchange Loss

occurs when a decrease in the value of a foreign currency relative to the reporting currency leads to a loss when foreign currency transactions are settled or translated.

Payable

refers to an amount of money that a company owes to suppliers or creditors and is recorded as a liability on the company's balance sheet until it is paid.

Foreign Currency Monetary Unit

A unit of currency from a country other than the domestic currency of the entity reporting that is used in international transactions or other monetary statements.

Exchange Loss

A financial loss realized when converting currencies due to a decrease in the value of the exchanged currency.