Exam 15: Flexible Versus Fixed Exchange Rates,european Monetary Systems,and Macroeconomic Policy Coordination

If the exchange rate did reach the limit of its range,intervention burdens were to be shared symmetrically by the strong-currency members.

Before the euro,no large group of sovereign nations had voluntarily given up their own currency for a common currency.

The common currency adopted at the beginning of 1999 by eleven of the fifteen member countries of the European Union was known as:

How many members are in the European Monetary Union?

What country tried to slow the negotiations of the monetary union in the European Monetary Union?

_____________ was defined by the European Monetary System as the weighted average of the currencies of the EU members

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

A clean float system has no government intervention at all in foreign exchange markets.

A(n)______________ is a fixed exchange rate system where the band of allowed fluctuation is very narrow.

From March 1979 to September 1992,how many times the European Monetary System had to realign their currency as high-inflation member countries devalued their currencies?

The institution similar to the Federal Reserve System in the United States that would control the money supply and issue the single currency of the European Union is the:

Under a(n)_____________ ,the nation's monetary authorities are entrusted with the responsibility of intervening in foreign exchange markets to smooth out short-run fluctuations in exchange rates without attempting to affect their long-run trend.

Which of the following was (were)not one of the main feature(s)of the European Monetary System (EMS)?

A(n)______________ should aim at maximizing the benefits from permanently fixed exchange rates and minimizing the costs.

Pegging or fixing the exchange rate at one level usually results in excess demand or excess supply of foreign exchange.