What is destabilizing speculation? What role did it play in the collapse of the Bretton Woods system?
What will be an ideal response?
Destabilizing speculation refers to actions by investors that make it more difficult to maintain a fixed exchange rate. Destabilizing speculation in 1971 against the German mark led to the collapse of the Bretton Woods System. Investors became convinced in early 1971 that Germany would have to allow a revaluation of the mark against the dollar. Investors increased their demand for marks, which increased the shortage of marks. The West German government finally opted out of the fixed exchange-rate system and allowed the mark to float against the dollar.
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Which of the following would decrease the current account balance of the United States?
A) a decrease in the amount of money the U.S. government sends in foreign aid to other countries B) a decrease in imports C) a decrease in the amount of income U.S. companies pay out to foreigners who own investments in the U.S. D) a decrease in the balance of trade
The European Central Bank (ECB) pursues a hybrid monetary policy strategy that has elements in common with the -targeting strategy previously used by the Bundesbank but also includes some elements of targeting
A) monetary; inflation B) inflation; monetary C) monetary; exchange rate D) monetary; nominal GDP
Which of the following would eliminate scarcity as an economic problem?
a. Resumption of the steady productivity growth. b. Discovery of sufficiently large new energy reserves. c. Moderation of people's competitive instincts. d. None of these choices.
An increase in labor productivity would cause a rightward shift of the labor supply curve.
Answer the following statement true (T) or false (F)