Until August 1971, industrialized countries around the world maintained a fixed

Question

Until August 1971, industrialized countries around the world maintained a fixed exchange rate of their currencies with the U.S. dollar, which was linked to gold. The gold standardized system was called the Brett on woods Fixed Exchange Rate System This system collapsed m 1971, and since then, the dollar has not been linked to gold. Based on your understanding of the international monetary system, complete the Mowing statements: A___exchange rate is the quoted price for a unit of foreign currency to be delivered at a specified date in the future. The government sets a___exchange rate that is allowed to fluctuate only slightly (if at all) around the par value. When American customers import less from Europe than they export to Europe, the euro___relative to the dollar. The____of a currency refers to a decrease or Increase, respectively, in the foreign exchange value of a floating currency. Under a___floating regime, the government plays a significant role in managing the exchange rate by manipulating the currency's Supply and demand. Currencies under such a regime are___currencies.

Explanation / Answer

Solution :

1) Forward exchange rate

2) Fixed or pegged exchange rate

3) Euro declines

4) Floating Exchnage Rate of currency

5) Managed floating regime

Managed floating currencies

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