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
108
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 abolition of the gold standard in U.S.was resulted from______。
选项
A、the decline of the purchasing power of the U.S.dollar
B、policy of deflation
C、the decreased value of gold
D、the Depression
答案
A
解析
细节题。由题干可知答案在文章的第二段第二、三句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.(美元由于受通货膨胀影响-对于相关货物美元购买力下降,同时其他货币变得更有价值、更稳定。最终,1971年,美国完全废除了金本位)。所以答案选择A。
转载请注明原文地址:https://kaotiyun.com/show/Qag7777K
0
大学英语四级
相关试题推荐
Childrenmodelthemselveslargelyontheirparents.Theydosomainlythroughidentification.Childrenidentify【C1】______apar
A、Heusuallytalksquietly.B、Heusuallyassignshomework.C、Hedidn’tteachclasstoday.D、Henoticedthatthestudentsdidn’t
ByfarthemostcommonsnakeinBritainistheadder(蝰蛇).InScotland,infact,therearenoothersnakesatall.Theadderis
A、goingtothecinema.B、buyingsomeDVDs.C、doinganinternetsearch.D、readingamagazine.C此题考查听细节的能力,而且所听即所得。对应答案句wecould
ThenativepeopleofNorthandSouthAmericaweregiventhename"Indians"bythe【B1】______ChristopherColumbus.Hethoughthe
A、Anessay.B、Amagazinearticle.C、Apoem.D、Ashortstory.D信息明示题。文章指出,YourassignmentforWednesdayistoreadHemingway’ss
A、Thefamilyandtheschool.B、Theadultsandthemassmedia.C、Thesocietyandtheyoungpeople.D、Noneoftheabove.C题目询问说话人认
A、Shefeelsangry.B、Shefeelstired.C、Shefeelshungry.D、Shefeelsdisappointed.B[听力原文]M:It’salmostmidnight.Whydon’tw
A、Gocamping.B、Decoratehishouse.C、Rentatent.D、Organizeaparty.A男士询问女士这里是否出售露营装备,女士给出肯定的回答,并列出了她所能提供的用品。由此可以推断,男士可能会去露营。
IfWatergate______,Nixonwouldnothaveresignedfrompresidency.
随机试题
(2009年)为扩大市场份额,经股东大会批准,甲公司20×8年和20×9年实施了并购和其他有关交易。(1)并购前,甲公司与相关公司之间的关系如下:①A公司直接持有B公司30%的股权,同时受托行使其他股东所持有B公司18%股权的表决权。B公司董事会由
公文行文规范的内容包括()
下列关于期货交易的保证金的说法正确的是()
注册会计师在审计被审计单位财务报表中的存货项目时,能根据计价和分摊认定推论得出的审计目标有()。
甲公司为增值税—般纳税人,适用的增值税税率为17%。(1)2011年3月1日,甲公司向乙公司销售—批商品,按价目表上标明的价格计算,其不含增值税额的售价总额为2000万元。因属批量销售,甲公司同意给予乙公司10%的商业折扣;同时甲公司规定的现金折扣条件
一般材料:女性,30岁,大学毕业,工厂技术员。主要问题:婚姻冲突,丈夫外遇,想离婚又怕影响孩子,对丈夫充满怨恨,情绪低落1个月。心理咨询师在了解求助者的基本背景后,决定对其采取合理的情绪疗法,下面是咨询过程中的一个片段。咨询师:你觉得什么原
在城市抗震防灾规划中,()应该被列为城市总体规划的强制性内容,并作为编制城市详细规划的依据。
玛尔莎的一个在可食花方面非常博学的朋友告诉她,所有的雏菊都不能吃,至少都是不可口的。然而,玛尔莎这样推理,因为存在一种属于菊花的雏菊,又因为存在味美可食的菊花,所以她的朋友告诉她的话肯定不正确。以下哪项的推理模式与玛尔莎的推理模式最为相似?
若f(x)在开区间(a,b)内可导,且x1,x2是(a,b)内任意两点,则至少存在一点ξ,使下列诸式中成立的是
PresidentCoolidge’sstatement,"ThebusinessofAmericaisbusiness",stillpointstoanimportanttruthtodaythatbusinessin
最新回复
(
0
)