Which of the Following Factors Make It Difficult for Emerging

question 25

Multiple Choice

Which of the following factors make it difficult for emerging market economies to choose a specific currency regime?

• A) weak fiscal, financial, and monetary institutions
• B) the tendency for commerce to allow currency substitution and the denomination of liabilities in dollars
• C) the emerging market's vulnerability to sudden stoppages of outside capital flows
• D) all of the above

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Definitions:

Profit and Loss Ratio

A financial metric that compares the gains and losses of a business over a specific period, often used to assess profitability.

Initial Investment

The initial amount of capital used to start a business venture, purchase an asset, or make an investment.

Interest Allowance

A sum that lenders may offer to borrowers, reducing the effective cost or total amount of payable interest on a loan.

Interest Allowance Method

A method used in accounting to allocate payments on an installment loan between the principal and the interest expense.