Use the Following to Answer Questions

question 110

Multiple Choice

Use the following to answer questions :
Figure: Exchange Market Intervention
-(Figure: Exchange Market Intervention) Look at panel (a) in the figure Exchange Market Intervention. Which of the following approaches could the Genovian government use to raise the value of the geno above 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 raising interest rates in Genovia
• C)eliminate the exchange controls that limit the right of Genovian citizens to buy U.S. dollars
• D)tighten the exchange controls that limit purchases of U.S. dollars by Genovian citizens

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Definitions:

Percentage Of Sales

A method or analysis tool that expresses components of a financial statement as a percentage of total sales.

Variable Expense

Costs that fluctuate with the level of production or business activity, such as raw material costs and shipping fees.

Break-Even

Break-even is the point at which total revenues equal total costs, resulting in no net profit or loss, indicating the volume of sales needed to cover costs.

Fixed Expense

Fixed expenses are costs that do not change with the level of production or sales volume, such as rent or salaries.