Q. 1. (a) Illustrate what are the alleged advantages of a fixed over a flexible exchange rate system? Explain how do advocates of flexible exchange rates respond?

(b) Illustrate what overall conclusion can be reached on whether flexible or fixed exchange rates are preferred?

1. Explain:

(a) Explain how economic conditions today differ from those prevailing under the gold standard period.

(b) Explain why the different economic conditions today would make the reestablishment of a smoothly working gold standard impossible.

2. (a) With respect to a nation with a $100-million quota in the IMF, indicate explain how the nation was to pay in its quota to the IMF and the amount that the nation could borrow in any one year under the original rules.

(b) Explain how are the rules different today?

3. Explain the role of the dollar under the Bretton Woods System.

4. Explain briefly the operation of the present international monetary system.