Chapter 10 notes - Chapter 10 The International Monetary...

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Chapter 10 The International Monetary System International monetary system - institutional arrangements countries adopt to govern exchange rates Floating exchange rate - a system under which the exchange rate for converting one currency into another is continuously adjusted depending on the laws of supply and demand Pegged exchange rate - currency value is fixed relative to a reference currency Dirty float - a system under which a country’s currency is nominally allowed to float freely against other currencies, but in which the government will intervene, buying and selling currency, if it believes that the currency has deviated too far from its fair value Fixed exchange rate - a system under which the exchange rate for converting one currency into another is fixed European Monetary System (EMS) - a system to regulate fixed exchange rates before the introduction of the euro Gold standard - the practice of pegging currencies to gold and guaranteeing convertibility Gold par value - the amount of currency needed to purchase one ounce of gold
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This note was uploaded on 12/04/2011 for the course MKT 310 taught by Professor Tunga during the Summer '10 term at Michigan State University.

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