Chapter 25 - Assignment 1: Alternative Exchange Rate Systems
Read Elizabeth M. Boschee's essay on "Floating Exchange Rates: The Only Viable Solution." This
essay was the first-place award winner
in the 1995-1996 essay contest sponsored by the Federal Reserve Bank of Minneapolis.
- According to this essay, what are the problems associated with attempting to maintain a system of fixed exchange rates?
- What are the problems associated with monetary unification?
- Why does Boschee argue that a system of floating exchange rates is the best available option?
What are the problems associated with such a system? What are the advantages?
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