Under a Fixed Exchange Rate Regime,if the Domestic Currency Is

question 35

Multiple Choice

Under a fixed exchange rate regime,if the domestic currency is initially overvalued,that is,below par,the central bank must intervene to purchase the ________ currency by selling ________ assets.

• A)domestic;foreign
• B)domestic;domestic
• C)foreign;foreign
• D)foreign;domestic

---

Definitions:

Extraordinary Gains

Unusual and infrequent gains recognized in a company's financial statements, separate from regular business operations.

Unrealized Losses

Losses on investments that have not been sold or settled and are still held by the company.

Cost of Goods Sold

Calculates the direct costs attributable to the production of the goods sold by a company, including materials and labor.

Extraordinary Items

Events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence, no longer classified separately in financial statements as of recent accounting standards.