首页
外语
计算机
考研
公务员
职业资格
财经
工程
司法
医学
专升本
自考
实用职业技能
登录
外语
Exchange Rates:A Brief History of Exchange Rates For centuries,the currencies of the world were backed by gold.That is,a pie
Exchange Rates:A Brief History of Exchange Rates For centuries,the currencies of the world were backed by gold.That is,a pie
admin
2013-06-03
36
问题
Exchange Rates:A Brief History of Exchange Rates
For centuries,the currencies of the world were backed by gold.That is,a piece of paper currency issued by any world government represented a real amount of gold held in a vault by that government.In the 1930s,the U.S.set the value of the dollar at 8 single,unchanging level:l ounce of gold was worth $35.After World War II,other countries based the value of their currencies on the U.S.dollar.Since everyone knew how much gold a U.S.dollar was worth,then the value of any other currency against the dollar could be based on its value in gold.A currency worth twice as much gold as a U.S.dollar was,therefore,also worth two U.S.dollars.
Unfortunately,the real world of economics outpaced this system.The U.S.dollar suffered from inflation(its value relative to the goods it could purchase decreased),while other currencies became more valuable and more stable.Finally,in 1971,the U.S.took away the gold standard altogether.This meant that the dollar no longer represented an actual amount of a precious substance-market forces alone determined its value.
Today,the U.S.dollar still dominates many financial markets.In fact,exchange rates are often expressed in terms of U.S.dollars.Currently,the U.S.dollar and the euro account for approximately 50 percent of all currency exchange transactions in the world.Adding British pounds,Canadian dollars,Australian dollars,and Japanese yen to the list accounts for over 80 percent of currency exchanges altogether.
Methods of Exchange:the Floating Exchange Rate
There are two main systems used to determine a currency’s exchange rate:floating currency and pegged currency.The market determines a floating exchange rate.In other words,a currency is worth whatever buyers are willing to pay for it.This is determined by supply and demand,which is in turn driven by foreign investment,import/export ratios,inflation,and a host of other economic factors.
Generally,countries with mature,stable economic markets will use a floating system.Virtually every major nation uses this system,including the U.S.,Canada and Great Britain.Floating exchange rates are considered more efficient,because the market will automatically correct the rate to reflect inflation and other economic forces.
The floating system isn’t perfect,though.If a country’s economy suffers from instability,a floating system will discourage investment.Investors could fall victim to wild swings in the exchange rates,as well as disastrous inflation.
Methods of Exchange:the Pegged Exchange Rate
A pegged,or fixed system,is one in which the exchange rate is set and artificially maintained by the government.The rate will be pegged to some other country’s dollar,usually the U.S.dollar.The rate will not fluctuate from day to day.
A government has to work to keep their pegged rate stable.Their national bank must hold large reserves of foreign currency to mitigate changes in supply and demand.If a sudden demand for a currency was to drive up the exchange rate,the national bank would have to release enough of that currency into the market to meet the demand.They can also buy up currency if low demand is lowering exchange rates.
Countries that have immature,potentially unstable economies usually use a pegged system.Developing nations can use this system to prevent out-of-control inflation.The system can backfire,however,if the real world market value of the currency is not reflected by the pegged rate.In that case,a black market may spring up,where the currency will be traded at its market value,disregarding the government’s peg.
When people realize that their currency isn’t worth as much as the pegged rate indicates,they may rush to exchange their money for other,more stable currencies.This can lead to economic disaster,since the sudden flood of currency in world markets drives the exchange rate very low.So if a country doesn’t take good care of their pegged rate,they may find themselves with worthless currency.
Methods of Exchange:Hybrids
In reality,few exchange rate systems are 100 percent floating,or 100 percent pegged.Countries using a pegged rate can avoid market panics and inflationary disasters by using a floating peg.They peg their rate to the U.S.dollar,and that rate doesn’t fluctuate from day to day.However,the government periodically reviews their peg,and makes minor adjustments to keep it in line with the true market value。
Floating systems aren’t really left to the mercy of market forces,either.Governments using floating exchange rates make changes to their national economic policy that can affect exchange rates,directly or indirectly。Tax cuts,changes to the national interest rate,and import tariffs can all change the value of a nation’s currency,even though the value technically floats.
The Euro
On January 1,2002,the euro became the single currency of 12 member states of the European Union-making it the second largest currency in the world(the U.S.dollar being the largest).This was,to date,the largest currency event in the history of the world;twelve national currencies completely disappeared and were replaced by the euro。
Although the euro is fundamentally a tool to enhance political solidarity,it also has the economic effect of unifying the economies of participating countries.Some of the euro’s advantages,in regard to economics,include:
Elimination of exchange-rate fluctuations-the euro eliminates the fluctuations of currency values across certain borders.
Transaction costs-tourists and others who cross several borders during the course of a trip had to exchange their money as they entered each new country。The costs of MI of these exchanges added up significantly.With the euro,no exchanges are necessary within the Euroland countries.
Increased trade across borders-the price transparency,elimination of exchange-rate fluctuations,and the elimination of exchange-transaction costs all contribute to an increase in trade across borders of all the Euroland countries。
Increased cross-border employment-with a single currency,it is less cumbersome for people to cross into the next country to work,because their salary is paid in the same currency they use in their own country.
In a fixed system,the government must______if there is a sudden demand for one currency to keep the system stable.
选项
A、sell enough of that currency into the market
B、buy up that currency in the market
C、discourage investment
D、hold large reserves of that currency
答案
A
解析
细节题。由题目中的sudden demand for one currency找到小标题Methods of Exchange:the Pegged Exchange Rate下第二段第三句If a sudden demand for a currency was to drive up the exchange rate, the national bank would have to release enough of that currency into the market to meet the demand.(如果突然出现对一种货币的需求引起汇率提高,国家银行将向市场投放足够的货币以满足要求。)所以答案选择A。
转载请注明原文地址:https://kaotiyun.com/show/1ag7777K
0
大学英语四级
相关试题推荐
WhenKatherineGoldsteinwas【S1】______upinthesuburbsofWashington,D.C.,hermom,anartist,wasusuallyhomewaitingfor
WhenKatherineGoldsteinwas【S1】______upinthesuburbsofWashington,D.C.,hermom,anartist,wasusuallyhomewaitingfor
A、Airtrafficconditions.B、Roadconditions.C、Newtrafficrules.D、Trafficjamsonhighways.A事实细节题。本题关键句为“Inthecomingyears,
Weknowthatthepeopleinourfamily,school,andpeergroupaffectthepersonwe【C1】______.Inaddition,themassmedia,【C2】_
Nooneshouldbeforcedtowearauniformunderanycircumstances.Uniformsaredemandingtothehumanspiritandtotallyunnece
Theauthorthinksthat______.WhichofthefollowingisNOTmentionedinthepassage?
Scienceforself-reliancehas,inrecentyears,becomeamatterofgreatconcernforThirdWorldanddevelopingnations.Thesen
Womenarequiteoftencompetentdrivers,buttheyareveryseldomconsistentlyfirst-class.Atbesttheyareamildhazard,atw
AboutGenderDifferencesItissaidthatthefirstthingweaskaboutanewbornbabyis"Isitaboyoragirl?"Butitmigh
Inrecentyearsmanycountrieshavebeenfacedwiththeproblemofhowtomaketheirworkersmoreproductive.Someexpertsclaim
随机试题
长期服用肾上腺皮质激素的急症手术患者,手术巾和手术后应【】
关于月经下列哪项是正确的
左心衰竭患者在继发右心衰竭之后,其肺淤血程度减轻。
A.速发型超敏反应B.迟发型超敏反应C.抗体刺激型超敏反应D.细胞毒型超敏反应E.免疫复合物型超敏反应Ⅳ型超敏反应又称
已知某建设项目计算期为n,基准收益率为ic内部收益率为IRR,则下列关系正确的有当( )。
场景盖梁是指桩柱墩墩帽,除装配式的以外,需要现场立模浇筑。现浇混凝土盖梁施工应控制好模板设计、支架搭拆、预应力张拉三大环节的特殊点。根据场景,回答下列问题。作为盖梁模板的支护系统,其立杆底部应有通长的槽钢或厚度不小于()的木板且上设有100m
把下面的六个图形分成两类,使每一类图形都有各自的共同特征或规律,分类正确的一项是:
维权成本过高的问题让诸多消费者即使有法律法规赋予的“尚方宝剑”,也会因为实际利益的考量而________。填入画横线部分最恰当的一项是:
阅读下列程序说明和C程序,把应填入其中(n)处的字句,写在对应栏内。【程序说明】对角线下元素全为0的矩阵称为上三角矩阵,设对于一个n×n的上三角矩阵a,为节约存贮,只将它的上三角元素按行主序连续存放在数组b中。下面的函数trans在不引入工作
广州以“购物天堂”著称。这里有众多的市场、商业街和购物中心。各种世界名牌商品(commodity)都可以在这里找到,你可以在市中心买到几乎任何你想要的东西。在广州,同类型的商店通常扎堆在一起,久而久之就形成了许多具有鲜明特色的街道。夜市是从黄昏开市至午夜,
最新回复
(
0
)