Chap002 14 - 56. The choice between the alternative...

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54. Following the demise of the Bretton Woods system, the IMF A. created a new role for itself, providing loans to countries facing balance-of-payments and exchange rate difficulties. B. ceased to exist, since the era of fixed exchange rates had ended. C. became the sole agent responsible for maintaining fixed exchange rates. D. became the central bank of the United Nations. 55. Under a flexible exchange rate regime, governments can retain monetary policy independence because the external balance will be achieved by A. the exchange rate adjustments. B. the price-specie flow mechanism. C. the Triffin paradox. D. none of the above
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Unformatted text preview: 56. The choice between the alternative exchange rate regimes (fixed or floating) is likely to involve a trade-off between A. national monetary policy autonomy and international economic integration. B. exchange rate uncertainty and national policy autonomy. C. Balance of Payments autonomy and inflation. D. unemployment and inflation. 57. Under a purely flexible exchange rate system A. supply and demand set the exchange rates. B. governments can set the exchange rate by buying or selling reserves. C. governments can set exchange rates with fiscal policy. D. answers b) and c) are correct....
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