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
46
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.
The advantages of the euro include elimination of exchange-rate fluctuations,transaction costs,increased trade across borders,and______.
选项
答案
increased cross-border employment
解析
本题是对使用欧元好处的总结,见文章的最后一个部分第四点,即可得答案。
转载请注明原文地址:https://kaotiyun.com/show/Bag7777K
0
大学英语四级
相关试题推荐
Childrenmodelthemselveslargelyontheirparents.Theydosomainlythroughidentification.Childrenidentify【C1】______apar
Todaymedicalcareisplacingmorestresson______.Accordingtotheauthor,thetruemeaningof"wellness"isforpeople____
WhenKatherineGoldsteinwas【S1】______upinthesuburbsofWashington,D.C.,hermom,anartist,wasusuallyhomewaitingfor
A、Atafriend’shome.B、Atahotel.C、Atauniversitydormitory.D、Atherparents’home.B细节题。由选项可预知此题考查地点,属于直接提问型,答案为听到的相关细节,可边
Weknowthatthepeopleinourfamily,school,andpeergroupaffectthepersonwe【C1】______.Inaddition,themassmedia,【C2】_
A、Attheairport.B、Inarestaurant.C、Inabookingoffice.D、Atthehotelreception.D推理判断题。选项表明对话内容与机场、餐馆、售票处、旅馆接待处,即与场景有关。可以根
A、Shewenttothepartywithoutknowingit.B、Shewasinvitedtotheparty.C、Shewaspresentfortheparty.D、Shewasabsentfr
Manyofusstilltendtoregardemotionsasinterferingwithrationalthought,andsometimeslandingusintrouble.Butinrecen
TrustMe,IAmaRobotRobotsafety:asrobotsmoveintohomesandoffices,ensuringthattheydonotinjurepeoplewillbe
RoadRageAlltheRageTomanypeopletheterm"RoadRage"describesarelativelymodemconceptofdrivers"gettingworkedu
随机试题
20世纪60年代以来,许多国家推行“教育先行”的改革,以促进国民经济快速发展。这种政策的理论基础是()
试述社会主义市场经济体制的主要任务。
EventhoughheknewthatIshouldstudy,hestill___________metogotoseethemovie.
完全随机设计的方差分析中的组间均方是
企业在使用注册商标时的主要义务是()。
付款人承兑时在汇票上记载“收款人交货并验收合格后付款”。依我国《票据法》,此记载的后果是()。
人民法院在适用简易程序审理刑事公诉案件时,下列哪些选项是人民检察院应当要求人民法院将简易程序转为普通第一审程序审理案件的情形?
(一)资料丙汽车制造股份有限公司(以下简称丙公司)成立于2000年,主要生产小汽车,是增值税一般纳税人。2012年4月,丙公司向丁公司销售了一批小汽车,双方签订了书面买卖合同;为支付货款,丁公司向丙公司签发了一张银行承兑汇票。2013年4月,丙公司在
封闭式基金合同生效的条件之一是,基金份额持有人人数达到()人以上。
Lunarsight-seeingtripsandorbitingspacehotelsamwithinroach,moonwalkingastronautEdwin"Buzz"Aldrinsaidlastweek,b
最新回复
(
0
)