In 1973,the reform of the international monetary system resulted in the change from:
A) Adjustable pegged rates to managed floating rates
B) Managed floating rates to adjustable pegged rates
C) Crawling pegged rates to freely floating rates
D) Freely floating rates to crawling pegged rates

Question

Quizplus · Accepted Answer

The reform of the international monetary system in 1973 resulted in the change from adjustable pegged rates to managed floating rates. Under the adjustable pegged rate system, countries set a fixed exchange rate for their currency in relation to another currency, typically the US dollar, but allowed for adjustments in the exchange rate to account for changes in economic conditions. However, this system was susceptible to speculative attacks and external shocks, which led to a breakdown in the system. In response, the international community shifted towards a more flexible system of managed floating rates, where the exchange rate is determined by market forces while central banks can intervene to smooth out any volatility.

In 1973,the Reform of the International Monetary System Resulted in the Change