Under a Fixed Exchange Rate Regime, the Government of the Country

question 20

Multiple Choice

Under a fixed exchange rate regime, the government of the country is officially responsible for:

• A) Intervention in the foreign exchange markets using reserves and gold.
• B) Setting the fixed/parity exchange rate.
• C) Maintaining the fixed/parity exchange rate.
• D) All of the above.

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Definitions:

Dividend Yield Ratio

A financial ratio that indicates how much a company pays out in dividends each year relative to its stock price.

Annual Cash Dividends

The total amount of cash payments made to shareholders in a year as a distribution of corporate profits.

Market Price

The current price at which an asset or service can be bought or sold in the marketplace.

Days' Sales Uncollected

A financial ratio indicating the average number of days it takes for a company to collect revenue after a sale has been made.