Business Finance Study Questions
1. A. What are the alleged advantages of a fixed over
a flexible exchange rate system? How do advocates of flexible
exchange rates respond?
B. WhatWhat are the alleged advantages of a fixed over
a flexible exchange rate system?
overall conclusion can be reached on whether flexible or fixed
exchange rates are preferred?
2. What is meant by a crawling peg system? How can such a system
overcome the disadvantage of an adjustable peg system?
economic conditions today differ from those prevailing under the
gold standard period.
the different economic conditions today would make the
reestablishment of a smoothly working gold standard impossible.
4. A. With respect to a nation with a $100-million quota in the
IMF, indicate how the nation was to pay in its quota to the IMF and
the amount that the nation could borrow in any one year under the
B. How are the
rules different today?
5. Explain the role of the dollar under the Bretton Woods
6. Explain briefly the operation of the present international