Exam 15: Exchange Rate Systems and Currency Crises

In 1944,financial ministers throughout the world met in New Hampshire to set up an adjustable pegged exchange rate system.This system became known as the

With a system of fixed exchange rates,a country that exhausts its international reserves in an attempt to keep its currency from _____ will have to ______ its currency

If Mexico dollarizes its economy,it essentially

Many developing nations with low inflation rates have pegged their currencies to the U.S.dollar as a way of allowing modest increases in domestic inflation rates.

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

A currency board is a type of a floating exchange rate system in which the commitment to the floating exchange rate is very strong.

Large industrial nations with diversified economies and small trade sectors have generally pegged their currencies to one of the world's key currencies.

With fixed exchange rates,assume that the home currency becomes overvalued.To maintain the fixed exchange rate,the home country's central bank must

Rather than constructing their own currency baskets,many nations peg the value of their currencies to a currency basket defined by the International Monetary Fund.Which of the following illustrates this basket?

If the Japanese yen appreciates against other currencies in the exchange markets,this will:

The exchange rate system established by the Bretton Woods Agreement of 1944-1973 was an adjustable pegged system.

Hong Kong essentially has fixed the exchange value of its currency to the

Given an initial equilibrium in the money market and foreign exchange market,suppose the Federal Reserve increases the money supply of the United States.Under a floating exchange-rate system,the dollar would:

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

When the United States abandoned the Bretton Woods System in 1973,it adopted a system of

Which exchange-rate system involves a "leaning against the wind" strategy in which short-term fluctuations in exchange rates are reduced without adhering to any particular exchange rate over the long run?

If Argentine adopts the U.S.dollar as its official currency,it seeks to eliminate the possibility of a speculative attack against its currency.

In order to stabilize a currency,the central bank will need to adopt

In recent years,the United States has accused China of manipulating the yuan so as to gain an unfair competitive advantage in global trade.Thus,proposals have been made that the United States should offset China's currency manipulation by

In a managed floating exchange-rate system,temporary stabilization of the dollar's exchange value requires the Federal Reserve to adopt a (an) ____ monetary policy when the dollar is appreciating and a (an) ____ policy when the dollar is depreciating.