Chap002 22 - C. only for as long as it has reserves of...

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91. Prior to the Argentine Peso Crisis A. Argentina had a "dirty float" where the government allowed the exchange rate to float within wide bands. B. Argentina had a currency board arrangement with the peso pegged to the U.S. dollar at parity. C. the Argentine government defaulted on its international debts. D. weakening of the U.S. dollar led the Argentine government to abandon dollarization. 92. A "good" (or ideal) international monetary system should provide A. liquidity, elasticity, and flexibility. B. elasticity, sensitivity, and reliability. C. liquidity, adjustments, and confidence. D. none of the above 93. A central bank can fix an exchange rate A. in perpetuity. B. only for as long as the market believes that it has the political will to do so.
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Unformatted text preview: C. only for as long as it has reserves of gold. D. only for as long as it has independence of monetary policy. 94. A booming economy with a fixed or stable nominal exchange rate A. inevitably brings about an appreciation of the real exchange rate. B. inevitably brings about a depreciation of the real exchange rate. C. inevitably brings about a stabilization of the real exchange rate. D. inevitably brings about increased volatility of the real exchange rate. 95. Advantages of a flexible exchange rate include which of the following? A. National policy autonomy B. Easier external adjustments C. The government can use monetary and fiscal policies to pursue whatever economic goals it chooses. D. All of the above...
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This note was uploaded on 11/09/2011 for the course FIN IFMG201 taught by Professor Eun during the Spring '11 term at Michigan Flint.

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