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McGraw-Hill/Irwin International Business, 6/e© 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.
The international monetary system
refers to theinstitutional arrangements that govern exchangerates.
Floating exchange rates occur when the foreignexchange market determines the relative value of acurrency
•The world’s four major currencies –
dollar, euro,yen, and pound
are all free to float against eachother