Adoption of a Currency Board

question 16

Multiple Choice

Adoption of a currency board

• A) is one method for achieving a soft peg policy.
• B) places responsibility for exchange rate management in the hands of an agency that is independent of political influences.
• C) mandates the use of currency in all domestic transactions.
• D) requires that a centralized institution holds interest-bearing assets denominated in the currency against which the nominal exchange rate is being fixed.
• E) mandates how the seigniorage revenue from the printing of money is to be distributed.

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Definitions:

Return-On-Sales Ratio

A financial metric that calculates how efficiently a company is generating profits from its revenue.

ROE

Return on Equity, a measure of financial performance calculated by dividing net income by shareholders' equity.

Inventory Turnover

A financial metric indicating how many times a company has sold and replaced inventory over a given period.

Fixed-Asset Turnover

A financial ratio that measures a company's ability to generate sales from its fixed assets.