Problem
1. Does a currency board seem to be a useful, practical arrangement for a country? What factors seem critical for a currency board's success?
2. Under what conditions would the world as a whole be an optimum currency area? Do you think that the industrialized countries should be one optimum currency area and the developing countries another? Explain.
3. "The hybrid systems combining fixed and flexible exchange rates are merely ways of avoiding having to make a choice between a fixed rate and a flexible rate. These systems invariably involve the ‘worst of both worlds.' " Discuss.