HW3 - European bonds jumped What is the likely link between...

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1 FIN 330 Homework 3: International Monetary Systems 1) Is a floating-rate system more inflationary than a fixed-rate system? Explain. 2) Will coordination of economic policies make exchange rates more or less stable? Explain. 3) In early 1996, in response to growing doubts about the ability of EC nations to meet the Maestricht criteria and move toward monetary union by the 1999 deadline, yields on
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Unformatted text preview: European bonds jumped. What is the likely link between the doubts on Maestricht and the EC bond yield increases? 4) "For a fixed exchange rate system to work the government must be able to make tight budget and monetary policies stick from the outset." Comment. 5) Problem 2 from the book ( MFM, Shapiro, Pg 126)...
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This note was uploaded on 09/16/2008 for the course FIN 330 taught by Professor Chaocharhhia during the Spring '07 term at University of Miami.

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