The Currency Used in the Duchy of Saxony Is the Ducet.The

question 33

Multiple Choice

The currency used in the Duchy of Saxony is the ducet.The demand for the Saxonian ducet in the foreign exchange market equals 14,000 - 3,000e and the supply of ducets in the foreign exchange market equals 2,000 + 2,000e,where e is the nominal exchange rate expressed in dollars per ducet.If the ducet is fixed at $2 per ducet,then to maintain this fixed rate the Duchy of Saxony's international reserves must ____________ ducets per period.

• A) decrease by 2,000
• B) decrease by 4,000
• C) increase by 1,000
• D) increase by 2,000
• E) increase by 4,000

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Definitions:

Macro-aging Schedule

A method used in accounting to categorize accounts receivable or payables based on the length of time they have been outstanding.

Accounts Receivable

Money owed to a business by its customers for goods or services that have been delivered but not yet paid for.

Average Collection Period

The average number of days it takes for a company to receive payments owed by its customers for sales on credit.

Credit Policies

Guidelines that a company follows to determine the creditworthiness of customers, terms of credit, collection procedures, and how much credit to extend.