An adjustment of central parities in the EMS is called a
A)realignment.
B)nominal appreciation or nominal depreciation.
C)real appreciation or real depreciation.
D)re-coupling.
E) re-paritization.

Question

Quizplus · Accepted Answer

An adjustment of central parities in the EMS is called a realignment. It involves changing the exchange rates of member countries' currencies with respect to each other and against the ECU to bring their currencies back in line with their economic fundamentals. Nominal appreciation or depreciation refers to changes in exchange rates due to market forces, while real appreciation or depreciation takes into account inflation differentials between countries. Re-coupling and re-paritization are not terms commonly used in the context of the EMS.

An Adjustment of Central Parities in the EMS Is Called