Consider the Following Scenario

question 26

Multiple Choice

Consider the following scenario.The Swiss franc is operating under a managed float exchange system.Under this system,what actions can the Swiss central bank take to influence the current exchange?

• A) Purchase or sell foreign currencies to bring the currency in line with its desired value
• B) Announce a new target exchange rates
• C) Commit to a new fixed rate against the current basket of foreign currencies
• D) Set guidelines for when inflationary pressures will force action on money supply changes

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Definitions:

Net Income

The total profits of a company after all expenses and taxes have been deducted from total revenues.

Owner's Drawings

The act of an owner drawing funds from a business in a sole proprietorship or partnership for personal needs.

Capital Account

A capital account is a financial statement that shows the changes in a company’s assets, liabilities, and equity, or an individual part of a nation's balance of payments reflecting net change in ownership of national assets.

Owner's Equity

The residual interest in the assets of a business after all liabilities are deducted.