Use the Following to Answer Questions

question 427

Multiple Choice

Use the following to answer questions :
Figure: Exchange Market Intervention
-(Figure: Exchange Market Intervention) Look at panel (b) in the figure Exchange Market Intervention. Which of the following approaches could the Genovian government use to decrease the value of the geno below its present equilibrium exchange rate and into the target range?

• A)use its own currency to buy U.S. dollars
• B)shift the demand for genos to the right by increasing interest rates in Genovia
• C)eliminate exchange controls that limit the right of Genovian citizens to sell foreign currency
• D)tighten the exchange controls that limit purchases of U.S. dollars by Genovian citizens

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Definitions:

Contra-Asset

A contra-asset account is an asset account where the account balance is a negative amount. It's used to offset the value of the asset account it is associated with, such as accumulated depreciation.

Cash Register Tapes

Physical or electronic records produced by cash registers, detailing each transaction made within a business.

Cash Short

A situation where the recorded amount of cash does not match the actual amount of cash available, often indicating errors or theft.

Cash Over

A situation where the amount of cash on hand is more than what was expected or reported, often requiring investigation.