18 - exchange rates

Question 1

appreciated

Answer 1

when a floating currency increases in value

Question 2

depreciated

Answer 2

when a floating currency decreases in value

Question 3

exchange controls

Answer 3

restrictions on the ability to trade foreign currencies by a country’s central bank

Question 4

adjustable peg

Answer 4

value of the fixed exchange rate can be changed as circumstances require

Question 5

crawling peg

Answer 5

frequent changes in the value of a fixed exchange rate

Question 6

revalued

Answer 6

when the authorities increase the value of their currencies against others

Question 7

devalued

Answer 7

when the authorities decrease the value of their currencies against others

Question 8

international money fund

Answer 8

a multinational institution set up in 1947 to operate the adjustable peg exchange rate system

Question 9

ceiling price

Answer 9

maximum price determined by the authorities

Question 10

floor price

Answer 10

minimum price determined by the authorities

Question 11

dirty float

Answer 11

manipulation of a floating rate to gain advantages over trading partners