Exhibit 10-3 Aggregate supply and demand curves
In Exhibit 10-3, the change in equilibrium from E1 to E2 represents:

Suppose that trade in asset is not allowed but the two countries sign a treaty that guarantee the sending of 25 tons of kiwi in good time by the high output country in that season. What will the outcome of such a treaty? Explain why

What will be an ideal response?

The reason for calling the current exchange rate system a "managed float" is

a. it is managed by the IMF b. it is basically a misnomer because it is impossible to "manage" exchange rates c. it recognizes that there will be some intervention by central banks d. only the forces of supply and demand determine the exchange rates e. Congress passed a law declaring that the exchange rate system be legally termed "managed float"