To Maintain Fixed Exchange Rates When Countries Had Balance of Payments

question 7

Multiple Choice

To maintain fixed exchange rates when countries had balance of payments deficits and were losing international reserves,the ________ would loan ________ countries international reserves contributed by other members.

• A) IMF; deficit
• B) IMF; surplus
• C) World Bank; deficit
• D) World Bank; surplus

---

Definitions:

Salvage Value

An asset's projected market price at the termination of its serviceable life.

Simple Rate Of Return

The rate of return computed by dividing a project’s annual incremental accounting net operating income by the initial investment required.

Technologically Obsolete

A state where a product or equipment becomes outdated or no longer competitive due to advances in technology.

Discount Rate

This is the interest rate used in discounted cash flow analysis to determine the present value of future cash flows.