Under the international monetary system as it actually operated between 1947 and

Question

Under the international monetary system as it actually operated between 1947 and 1971, the emergence of seemingly chronic deficits and surpluses in various countries' balance-of payments positions (i.e., deficits and surpluses which did not seem to get eliminated) was called the problem. Select one: a. liquidity D. Confidence c. adjustment d. IMF A situation where a country announces a parity value for its currency and permits small variations around that value, but also adjusts the parity regularly by small amounts according to various indicators, is known as Select one: a. a dirty float. b. a crawling peg. c. a managed float strategy of "leaning against the wind." d. a "wider band." Proponents of fixed exchange rates would find the most support for their position in which one of the following empirical results regarding the relationship between exchange rate variations and the volume of international trade? (Assume that the empirical tests adequately account for other factors that influence the volume of trade.) Select one: a. no discernible relationship between exchange rate variations and the volume of trade b. a negative relationship between exchange rate variations and the volume of trade c. a mildly positive relationship between exchange rate variations and the volume of trade d. a strongly positive relationship between exchange rate variations and the volume of trade

Explanation / Answer

1. c. adjustment problem.    2. b. It is known as a Crawling peg. 3. d.it should be a strong positive relationship between exchange rate variation and the volume of trade. 4.c. cannot/ can

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