Under Purely Flexible Exchange Rates

question 48

Multiple Choice

Under purely flexible exchange rates,

• A) there is no intervention by the domestic fiscal or monetary authorities to specifically target the nominal exchange rate.
• B) there is only occasional intervention by the domestic fiscal or monetary authorities to specifically target the nominal exchange rate.
• C) the domestic fiscal and monetary authorities retain considerable flexibility to prevent short-run variability in the nominal exchange rate.
• D) the domestic fiscal and monetary authorities retain considerable flexibility to prevent long-run variability in the nominal exchange rate.
• E) there is only intervention by monetary authorities to specifically target the nominal exchange rate.

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Definitions:

Cash Sales

Transactions in which customers pay for goods or services at the time of purchase with cash.

Cash Register

A device, either mechanical or electronic, designed to record and compute transactions where sales occur.

Internal Control

Systems and processes implemented by a company to ensure the reliability of financial reporting, compliance with laws and regulations, and efficiency of operations.

Elements

In accounting, elements refer to the basic categories of financial data that are classified in the financial statements, such as assets, liabilities, equity, revenue, and expenses.