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Exchange Rate System Quiz

The exchange-rate system that best characterizes the present international monetary arrangement used by industrialized countries is:

Which exchange-rate mechanism is intended to insulate the balance of payments from short-term capital movements while providing exchange rate stability for commercial transactions?

Which exchange-rate mechanism calls for frequent redefining of the par value by small amounts to remove a payments disequilibrium?

Under managed floating exchange rates, if the rate of inflation in the United States is less than the rate of inflation of its trading partners, the dollar will likely:

Under adjustable pegged exchange rates, if the rate of inflation in the United States exceeds the rate of inflation of its trading partners:

Under a pegged exchange-rate system, which does not explain why a country would have a balance-of- payments deficit?

Which exchange-rate system does not require monetary reserves for official exchange-rate intervention?

A primary objective of dual exchange rates is to allow a country the ability to insulate its balance of payments from net:

During the 1970s, the European Union, in its quest for monetary union, adopted what came to be referred to as the “Community Snake.” This device was a (an):

Under the historic adjustable pegged exchange-rate system, member countries were permitted to correct persistent and sizable payment deficits (i.e., fundamental disequilibrium) by