In what sense does the IMF act as a lender of last resort? How might the IMF's actions during the Mexican crisis of the mid-1990s have contributed to the Asian currency crisis a few years later?
Briefly describe how the Bretton Woods system worked.What advantages did it have over the gold standard? What problems did the Bretton Woods system eventually encounter?
Suppose that Ruritania has a fixed exchange rate versus the U.S.dollar.If foreign investors become convinced that the Ruritanian currency is overvalued,what actions might they take to profit from this conviction? Would these actions make it easier or harder for Ruritania to maintain the value of its currency versus the dollar? Why?