In Saying That the Present System of Flexible Exchange Rates

question 133

Multiple Choice

In saying that the present system of flexible exchange rates is managed we mean that:

• A)countries which allow their exchange rate to move freely will lose their borrowing privileges with the IMF.
• B)the value of any IMF member's currency can only vary 2 percent from its par value.
• C)IMF officials determine exchange rates on a day-to-day basis.
• D)the central banks of various countries buy and sell foreign exchange to smooth out short-term fluctuations or undesirable trends in exchange rates.

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Definitions:

Promissory Estoppel

A legal principle that prevents a party from backing out of a promise which led the other party to take action or abstain from it, based on the promise.

Illusory Promise

A statement that appears to be a promise but does not actually bind the party making it to any action or performance, rendering it unenforceable as a contract.

Release

A legal document or agreement resulting in one party forfeiting the right to make claims against another party in exchange for a settlement or relief.

Unforeseeably Difficult

Situations or tasks that could not have been predicted to be as challenging or complex as they are found to be.