A Currency Board Refers to the Case Where

question 5

Multiple Choice

A currency board refers to the case where:

• A)the central bank sterilizes changes in the money supply resulting from balance of payments disequilibria
• B)the money supply of the nation is backed by 100 percent international reserves
• C)the nation operates under flexible exchange rates
• D)the nation retains firm control over its money supply

---

Definitions:

Forward Exchange Rate

An agreed-upon exchange rate for a currency pair to be exchanged at a future date, used in hedging and trading strategies.

Consolidated Statements

Consolidated statements are financial reports that combine the financial results of a parent company and its subsidiaries, presenting the financial position and performance of the entire group as a single entity.

Future Date

A specific date that is in the period after the current date, often referenced in contracts or future planning.

U.S. Dollars

The official currency of the United States, widely used as a standard of exchange in international transactions.