A 'Fixed Exchange Rate System' Is One in Which

question 77

Multiple Choice

A 'fixed exchange rate system' is one in which:

• A)the currency is backed by a fixed amount of gold.
• B)the government defines its currency to be worth a certain amount in terms of another currency and ensures that the rate remains at that level.
• C)foreign exchange traders accept only a fixed price for their goods, regardless of the demand and supply for the currency.
• D)demand and supply adjust so that there are no shortages or surpluses of currency in the market.

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Definitions:

Dividend Income

Income received from owning shares in a corporation, typically paid out from the company's profits.

Shares Purchased

Refers to the acquisition of ownership units in a corporation, typically through transactions on stock exchanges.

Dividend Declared

A payment announced by a company's board of directors to be distributed among shareholders.

Capital in Excess

Funds received by a company from selling shares at a price above the par value, also known as additional paid-in capital.