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Q. Explain why it may make sense for the United States, Japan, and Europe to allow their mutual exchange rate to float?
Answer: Even though these regions trade amid each other the extent of that trade is modest compared with regional GNPs as well as interregional labour mobility is low.
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Q. Explain why the EMS countries decided to fix their exchange rates against the German DM? Answer: In this manner the other EMS countries in effect imported the credi
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Q. What are the main functions of money? Answer: Money serves generally three important functions that are a unit of account, a medium of exchange and a store of value.
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Q. Should the IMF be abolished? Discuss. Answer: Arguments for eliminating the IMF must mention moral hazard and insistence on high interest rates and hasty structural
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Q. Present the case for floating exchange rates. Answer: 1. Monetary policy autonomy Governments would able to use financial policy to reach internal and extern
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