The system of adjustable parities allowed for the devaluation of a country's currency by more than 10 percent if the International Monetary Fund (IMF)agreed that a:
A) country was in a trade surplus with the other member countries.
B) country's balance of payments was in "fundamental disequilibrium."
C) country had achieved balance-of-trade equilibrium.
D) country's imports were lower than its exports.
E) country was facing price inflation.

Question

Quizplus · Accepted Answer

The system of adjustable parities allowed for the devaluation of a country's currency by more than 10 percent if the International Monetary Fund (IMF) agreed that a country's balance of payments was in "fundamental disequilibrium." This means that a country was experiencing persistent and unsustainable deficits or surpluses in its payments with other member countries. Devaluing the currency could help restore equilibrium by making a country's exports more competitive and its imports more expensive.

The System of Adjustable Parities Allowed for the Devaluation of a Country's