Which of the Following Statements Is True About a Currency

question 9

Multiple Choice

Which of the following statements is true about a currency board system?

• A)Under a strict currency board system,interest rates adjust automatically based on the supply and demand of domestic currency.
• B)To convert domestic currency on demand into another currency,a currency board takes grants from the International Monetary Fund.
• C)This system is a true fixed exchange rate regime,because the domestic currency is fixed against other currencies.
• D)A currency board can issue additional domestic currency even when there are no foreign exchange reserves to back it.
• E)A currency board authorizes the government to print money and set interest rates.

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Definitions:

Instrumental Goals

Objectives aimed at acquiring the means or resources necessary to achieve more significant end goals.

Long-range Goals

Objectives or aims set to be achieved over an extended period, planning beyond the immediate future.

Short-term Objectives

Goals or targets that are intended to be achieved in the near future.

Nominal Group

A structured form of brainstorming that involves individuals generating ideas independently before sharing them with the group to prioritize or make decisions.