Classifying exchange rate regimes: Deeds vs. words aka do mf lie?
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What is the main difference between the IMF de jure classification and the de facto classification mentioned in the text?

  • IMF de jure classification focuses on fixed regimes, while de facto classification focuses on dirty floats.
  • IMF de jure classification is based on actual policies, while de facto classification is based on announced regimes. (correct)
  • IMF de jure classification focuses on hidden pegs, while de facto classification focuses on pure floats.
  • IMF de jure classification is based on exchange rates and reserves data, while de facto classification is based on government announcements.

    • What term is used in the text to describe regimes that have an explicit commitment to a fixed regime but shy away from it?

  • Hollowing out hypothesis
  • Fear of floating
  • Hidden pegs (correct)
  • Pure floats

    • What type of countries does the hollowing out hypothesis not apply to?

  • Countries with dirty floats
  • Countries with limited access to capital markets (correct)
  • Countries with fixed exchange rate regimes
  • Countries with pure floats

    • What is associated with only relatively minor nominal exchange rate volatility according to the text?

    <p>Pure floats (C)</p> Signup and view all the answers

    What phenomenon has been observed in conjunction with the recent increase in the number of de jure floats?

    <p>Increase in the number of de facto dirty floats (C)</p> Signup and view all the answers

    What term is used to describe exchange rate regimes that have an explicit commitment to a fixed regime but shy away from it?

    <p>Hidden pegs (C)</p> Signup and view all the answers

    What has been observed in conjunction with the recent increase in the number of de jure floats, according to the text?

    <p>An increase in the number of de facto dirty floats (A)</p> Signup and view all the answers

    What is the main difference between the IMF de jure classification and the de facto classification mentioned in the text?

    <p>The de facto classification is based on data on exchange rates and international reserves, while the IMF de jure classification is based on the regime announced by governments. (A)</p> Signup and view all the answers

    To which type of countries does the 'hollowing out hypothesis' not apply?

    <p>Countries with limited access to capital markets (C)</p> Signup and view all the answers

    What, according to the text, is associated with only relatively minor nominal exchange rate volatility?

    <p>Pure floats (D)</p> Signup and view all the answers

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