Exam 20: Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination

The policy of intervention in the foreign exchange market to smooth out short-run fluctuations in exchange rates is called:

The formation of an optimum currency area is more likely to be beneficial:

If the band of allowed fluctuation under a fixed exchange rate system is made very wide,the system will resemble:

An alleged advantage of flexible over fixed exchange rates is:

The policy of changing par values by small preannounced amounts at frequent intervals until the equilibrium exchange rate is reached is called:

Everything else being the same,the volume of trade is likely to be:

Flexible exchange rates:

Under a flexible as compared to a fixed exchange rate system:

A fixed exchange rate system without a band of allowed fluctuation would require the nation's monetary authorities to intervene in the foreign exchange market:

The European Monetary System is or resembles a:

International macroeconomic policy coordination has become more useful and essential in recent decades because:

Which of the following statements is correct with respect to flexible exchange rates?

The European Monetary Union:

Most economists believe that under "normal conditions" speculation:

Price discipline is: