Which of the Following Is NOT Likely to Cause a Money

question 65

Multiple Choice

Which of the following is NOT likely to cause a money demand shock under a fixed exchange rate system?

• A) a decline in foreign interest rates
• B) a sudden decline in domestic output
• C) a sudden increase in domestic output
• D) a change in marginal tax rate in the foreign country

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Definitions:

Significant Influence

The capacity to exert power over, or sway, the operating and financial policies of another entity without having control over it.

Non-Strategic Investment

An investment made without the intention to influence or control the operation or management of the invested entity.

Board of Directors

A group of individuals elected by the shareholders of a corporation to oversee and make decisions on behalf of the company.

Consolidated Worksheet

A financial statement that combines the accounting records of a parent company and its subsidiaries, showing the financial results of the entire group as a single entity.