For a Country with a Fixed Exchange Rate,foreign Exchange Reserves

question 24

Multiple Choice

For a country with a fixed exchange rate,foreign exchange reserves are

• A) an asset of the domestic government.
• B) a liability of the domestic government.
• C) held by private banks.
• D) are unnecessary.

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Definitions:

Market Price

The going rate at which a particular market offers to buy or sell an asset or service.

Average Revenue

The revenue earned per unit of output sold; calculated by dividing the total revenue by the number of units sold.

Total Revenue

The total amount of money received by a firm from selling its goods or services.

Total Cost

The complete amount of money required for the production of a given level of output, including both fixed and variable costs.