APS210 Specifies That 'High-Quality Liquid Assets' Must Be Free from Encumbrances

question 48

Multiple Choice

APS210 specifies that 'high-quality liquid assets' must be free from encumbrances and include:

• A)cash
• B)long-term loans
• C)cash and eligible securities approved by APRA
• D)cash and long-term loans

Recognize the effects of capital flight on demand for loanable funds, supply of dollars, and net capital outflows in the foreign-currency exchange market.

Analyze the impact of a government default on its debt on the country's real interest rates and currency valuation in the open-economy macroeconomic model.

Identify how capital flight influences the market for foreign-currency exchange.

Evaluate the consequences of government bond defaults on a country's interest rates, net exports, and currency valuation.

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Definitions:

Negative Income Tax

A system of income support that provides individuals with an income guarantee. If an individual's earnings fall below a certain level, they receive supplemental pay from the government rather than paying taxes.

Earned Income Tax Credit

A refundable tax credit for low to moderate income working individuals and families, aimed at reducing poverty and encouraging work.

Unemployment

A situation where individuals who are capable of working and willing to work are not able to find employment.

Temporary Assistance

A form of financial aid provided by government agencies to individuals and families in need for a limited period.