Prepare a two page (double-spaced) essay and answer the following questions:

  1. Why the simultaneous targeting of the money supply and interest rates is sometimes impossible to achieve?

  2. How do central banks intervene in foreign exchange markets?

  3. What did the Bretton Woods Agreement do to the ability of foreign exchange rates to fluctuate freely?

Cite references to material that you use in preparing the essay.

Your essay will be graded on the following:

  • Describes the simultaneous targeting of money supply and interest rates.

  • Describes how central banks intervene in foreign exchange markets.

  • Discusses the impact the Bretton Woods agreement had on the ability of foreign exchange rates to fluctuate freely.

  • Uses at least one example in the essay.

  • Organization Grading Guidelines: Presentation is very effective and presented in a logical format with a clear beginning, middle, and end. There is a clear statement of ideas and smooth transitions. The writer has stated the main idea clearly and has provided relevant details. The main idea is clearly conveyed in a presentation that is highly relevant and interesting. The student provides evidence of thoughtful input. Details are rich and appropriate. Spelling, punctuation, and capitalization are virtually always correct.

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