The exchange rate system in which a country allows the value of the currency to be determined by the market forces of supply and demand is known as a A) currency board. B) floating exchange rate. C) target zone. D) pegged exchange rate system. ANSWER Answer: B
Date: September 19th, 2020
In the ________ exchange rate system, the currency has limited flexibility and the rate is kept within a fixed band. A) currency board B) floating exchange rate C) target zone D) pegged exchange rate system ANSWER Answer: C
Date: September 19th, 2020
What is the name of the account in which many central banks require their banks to hold a percentage of the deposits as reserves at the central bank? A) retained earnings B) excess reserves C) margin account D) required reserves ANSWER Answer: D
Date: September 19th, 2020
The phenomenon of foreign currency driving out local currencies as a means of payment and a savings vehicle is known as ________. A) seigniorage B) dollarization C) sterilization D) devaluation ANSWER Answer: B
Date: September 19th, 2020
What is the name of the unit of account created by the IMF which is sometimes used to denominate contracts? A) European currency unit B) special drawing right C) floating currencies D) basket of currencies ANSWER Answer: B
Date: September 19th, 2020
If a firm’s credit period is increased, the sales volume can be expected to ________, the investment in accounts receivable can be expected to ________, and the bad debt expenses can be expected to ________. A) increase; decrease; decrease B) increase; increase; decrease C) increase; increase; increase D) decrease; decrease; decrease ANSWER C
Date: September 19th, 2020
The net effect of changes in a cash discount period is quite difficult to analyze because they are directly attributable to the three forces affecting a firm’s investment in accounts receivable. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
If a firm’s credit period is decreased, the sales volume can be expected to ________, the investment in accounts receivable can be expected to ________, and the bad debt expenses can be expected to ________. A) increase; decrease; decrease B) increase; increase; decrease C) increase; increase; increase D) decrease; decrease; decrease ANSWER D
Date: September 19th, 2020
An increase in accounts receivable turnover due to an increase in collection efforts will decrease a firm’s marginal investment in accounts receivable. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Accounts receivable due over 90 days total ________. (See Table 14.6) A) $200,000 B) $470,000 C) $300,000 D) $100,000 ANSWER C
Date: September 19th, 2020
