What is a currency board?
What will be an ideal response?
A currency board is a government institution that exchanges domestic currency for foreign currency at a fixed rate of exchange. It is normally established to increase the credibility of a foreign exchange arrangement and thus increase confidence in the system. Currency boards achieve a credible fixed exchange rate by holding a stock of the foreign currency equal to 100 percent of the outstanding currency supply of the nation.
You might also like to view...
A major characteristic of monopoly is that
A) no barriers to entry exist. B) the product is identical to that produced by other companies. C) a barrier to entry keeps out competitors. D) competition is intense. E) a few firms compete with each other.
Per capita GNP is defined as a country's GNP divided by its
A) population. B) labor force. C) capitalists. D) None of the above.
The full-employment level of output is called:
A) aggregate demand. B) aggregate supply. C) potential output. D) none of the above.
The demand for curve for money
a. shows the amount of money people actually hold b. shows the amount of money people would like to hold, given the constraints they face c. shifts if the interest rate changes d. is independent of the price level e. changes whenever the Fed changes the money supply.