Under a Flexible Exchange Rate System,there Is No Need for Foreign

question 77

True/False

Under a flexible exchange rate system,there is no need for foreign exchange reserves.
There is no need to use foreign exchange reserves to maintain the exchange rate because the market is performing this function.

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Definitions:

Intra-entity Gross Profit

The profit made on transactions within the same company or between subsidiaries under the same parent company not yet realized outside the entity.

Equity Method

The Equity Method is an accounting technique used to record investments in associate companies, where the investment's carrying value is adjusted to recognize the investor's share of the associates' profits or losses.

Voting Common Stock

Shares of a company that grant the holder the right to vote on corporate matters at shareholder meetings.