Question 1

The Argentine peso was pegged to the US dollar at a rate of 1 to 1 until January 17,2002.Argentina experienced trade deficits in prior to the collapse of the currency board.Graphically illustrate the external adjustment mechanism.

Accepted Answer

The answer of The Argentine peso was pegged to the...

Question 2

Can all of the following three conditions:
(1)fixed exchange rate,
(2)free international flow of capital,and
(3)independent monetary policy
Be satisfied simultaneously?
 Why?
.

Accepted Answer

The answer of Can all of the following three conditions:
(1)fixed...

Question 3

Before World War I,GBP 2.2474 was needed to buy one ounce of gold.FF 310.00 would also buy one ounce of gold.What was the exchange rate between the French franc and the British Pound?

Accepted Answer

The answer of Before World War I,GBP 2.2474 was needed...

Question 4

The Chinese renminbi is currently pegged to the US dollar at a rate of 8.28 to 1.The renminbi is considered to be undervalued (that is the exchange rate should be lower).Graphically illustrate the external adjustment mechanism.What happens to the Chinese foreign exchange reserves?

Accepted Answer

The answer of The Chinese renminbi is currently pegged to...

Question 5

Suppose that the British pound is pegged to gold at £6 per ounce and one ounce of gold is worth FF12.The exchange rate is FF1.8/£ and you have FF11,000.How much profit can you make?
 (Assume zero shipping costs).

Accepted Answer

The answer of Suppose that the British pound is pegged...

Quiz 2: International Monetary System

The Argentine peso was pegged to the US dollar at a rate of 1 to 1 until January 17,2002.Argentina experienced trade deficits in prior to the collapse of the currency board.Graphically illustrate the external adjustment mechanism.

Can all of the following three conditions: (1)fixed exchange rate, (2)free international flow of capital,and (3)independent monetary policy Be satisfied simultaneously? Why? .

Before World War I,GBP 2.2474 was needed to buy one ounce of gold.FF 310.00 would also buy one ounce of gold.What was the exchange rate between the French franc and the British Pound?

The Chinese renminbi is currently pegged to the US dollar at a rate of 8.28 to 1.The renminbi is considered to be undervalued (that is the exchange rate should be lower).Graphically illustrate the external adjustment mechanism.What happens to the Chinese foreign exchange reserves?

Suppose that the British pound is pegged to gold at £6 per ounce and one ounce of gold is worth FF12.The exchange rate is FF1.8/£ and you have FF11,000.How much profit can you make? (Assume zero shipping costs).