If a Central Bank Does Not Want to See Its

question 20

Multiple Choice

If a central bank does not want to see its currency rise in value,it may pursue ________ monetary policy to ________ the domestic interest rate,thereby weakening its currency.

• A)expansionary;raise
• B)contractionary;raise
• C)expansionary;lower
• D)contractionary;lower

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Definitions:

Accounts Receivable-Year 2

The amount of money owed to a company by its customers for goods or services delivered or used but not yet paid for in the second fiscal year.

Realized Gross Profit

The total profit a company makes from its sales after deducting the cost of goods sold, but only on transactions completed within the reporting period.

Deferred Gross Profit-Year 2

The portion of profit from installment sales recognized in the second year, not immediately at the time of sale, due to revenue recognition principles.

Cost Of Installment Goods Sold

The cost assigned to goods that have been sold on installment, including both the cost of manufacturing and a portion of interest on the installment sales.