Under the Fixed Exchange Rate Regime

question 88

Multiple Choice

Under the fixed exchange rate regime,

• A)the combined balance on the current and capital accounts will be equal in size,but opposite in sign,to the change in the official reserves.
• B)the balance on the current and capital accounts will be equal in size,but opposite in sign.
• C)a current account surplus or deficit must be matched by an official reserves deficit or surplus.
• D)a capital account surplus or deficit must be matched by an official reserves deficit or surplus.

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Definitions:

Dominant Partner

A dominant partner typically refers to the more controlling or influential entity in a business relationship or alliance.

Mismanagement

The improper, inefficient, or negligent administration or handling of tasks or resources in a business, organization, or institution.

Merger Failures

Occurrences where the process of combining two or more companies into a single entity fails to achieve anticipated benefits, leading to operational or financial issues.

Valuation-Driven Acquisition

The process of buying a company based on the assessment of its value, often with the objective of acquiring it at a price that is perceived to be below its true worth.